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, 2003       Commission File Number 0-22597

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

                 Delaware                                         52-2075851
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       (State or other jurisdiction                                (I.R.S.
employer of incorporation or organization)                   identification no.)

946 West Penn Avenue, Robesonia, PA                                 19551
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 (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: (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 pursuant to Item
405 of Regulation S-B is not contained herein, and will not 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. [ ]

         Revenues for the Issuer's most recent fiscal year are $2,345,894.

         The aggregate market value of the voting stock held by non-affiliates
of the Issuer as of March 26, 2004 was approximately $2,659,273 (based upon a
closing price of $.90 per share).

         The number of outstanding shares of the Issuer's common stock as of
March 30, 2004 was 6,553,859 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 2004.
<PAGE>

                                 CIMNET(R), INC.

                                Table of Contents

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PART I ....................................................................   1

           ITEM 1.  BUSINESS...............................................   1
           ITEM 2.  PROPERTIES.............................................  20
           ITEM 3.  LEGAL PROCEEDINGS......................................  21
           ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.....  21

PART II ...................................................................  22

           ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                    STOCKHOLDER MATTERS....................................  22
           ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATIONS....................  23
           ITEM 7.  FINANCIAL STATEMENTS...................................  30
           ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                    ACCOUNTING AND FINANCIAL DISCLOSURE....................  31

PART III ..................................................................  31

           ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                    PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE
                    EXCHANGE ACT OF THE REGISTRANT ........................  31
           ITEM 10. EXECUTIVE COMPENSATION ................................  31
           ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                    MANAGEMENT AND RELATED STOCKHOLDER MATTERS ............  31
           ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.........  31
           ITEM 13. EXHIBITS, LISTS AND REPORTS ON FORM 8-K................  31
           ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.................  32

                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 "will,"
"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 conversion 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, 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, Johnson & Johnson, Raytheon, Timken,
Nestle Foods, Barber Foods, Caterpillar, Coca Cola and Andersen Windows. During
the year ended December 31, 2003, one of our customers accounted for more than
24 % of our total revenues.

Launch of .NET Factelligence(R) Suite

          After three years in development the Company is preparing to introduce
a revolutionary new product. CIMNET(R) is preparing to launch the industry's
first comprehensive "Suite" of completely integrated software solutions built on
Microsoft's .NET technology. We believe this unique ".NET Factelligence(R)
Suite" 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. The
".NET Factelligence(R) Suite" 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).

                                       1
<PAGE>

          To accelerate its efforts in launching the ".NET Factelligence(R)
Suite", the Company has entered into a license agreement with a third party for
the HMI/SCADA controls and is continuing to develop .NET standards into
Factelligence(R). The Company expects to release the new Factelligence suite in
the third quarter of 2004.

          Factelligence(R) is a configurable MES for companies looking to
prepare or enhance their factories for growth into make-to-order, lean,
outsourced or collaborative manufacturing strategies. 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.

          Factelligence(R) comprises the following modules or "managers".

          (a)  Production Manager. The Production Manager is used to record
production of goods. This includes scrapping of products and recording of serial
numbers. System security also forms part of this core module. Using Production
Manager, supervisors can adjust their production plans to meet changing
requirements and immediately broadcast the new schedule to shop floor operators.
Managers can access the production status real time through their web browsers.

          (b)  Product Definition Manager. The Product Definition Manager
defines the detailed BOM, recipes, product specifications and documentation with
revision control and security. The complete product definition is then available
to the shop floor in an easy-to-view format.

          (c)  Tracking Manager. The Tracking Manager records material
consumption, lot genealogy, shop floor inventory and Work In Progress (WIP).
Detailed status screens and reports enable instant visibility to track virtually
all aspects of shop floor operations.

          (d)  Labor and Shift Manager. The Labor and Shift Manager records
labor times and location of operators for each job and shifts. Further, it
assists managers in planning complex shift schedules including planned downtime
for each machine.

          (e)  DNC Manager. The management of valuable machine tools by the DNC
Manager provides a reliable method to upload and download programs to customers'
machines. DNC Manager includes a powerful g-code editor to centrally create and
edit machining designs.

          (f)  Folders Manager. "Paperless" manufacturing is well within
customer's reach with the Folders Manager. This module provides for the
definition of electronic folders for presentation of important computer assisted
design drawings, tooling instructions and multimedia to manufacturing operators.

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<PAGE>

          (g)  Procedure Step Manager. Procedure Step Manager assists customers
in designing complex standard operating procedures to guide operators through
their assembly or validated process. It includes instruction, data entry,
electronic signature and process control steps. This manager integrates with
other document management and plant control systems.

          (h)  Certification Manager. The Certification Manager defines which
people have the authority to make important products, operate complex processes
or approve on quality results.

          (i)  Datalog Manager. The Datalog Manager defines data archiving
schemes to record key process and quality data. Information is archived against
the specific job, line and other production domains.

          (j)  Machine Utilization Manager. By using the Machine Utilization
Manager operators can capture full equipment history and see machine status to
improve utilization performance.

          (k)  Supply Chain Connector. The Supply Chain Connector integrates all
Factelligence(R) configuration and historical data with common ERP, document
management, maintenance and supply chain management systems.

          (l)  Factory Connector. The Factory Connector integrates
Factelligence(R) into the plant control system. Interfaces to popular HMI (Human
Machine Interface) systems and OPC (OLE (Object Linking and Embedding) for
Process Control) servers provide full read-write capabilities to download set
points and acquire live process and quality data.

          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.

          DNC Professional(TM) is an ideal DNC solution for manufacturers to
enhance their CNC operations. It installs easily onto existing networks and
industry standard hardware, making it almost immediately productive.
Easy-to-use, and operating under Windows(R) 95, 98, 2000 and NT, the software
prompts the operators with the appropriate job queue and documents to assure
that components are manufactured within the proper sequence and with the correct
information. The information that the operators can view includes machine code,
textual instructions, and graphical instructions with full multi-media
capabilities.

                                       3
<PAGE>

          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.

RealTime Acquisition

          On April 14, 2000, CIMNET(R), Inc. (the "Company") and the
stockholders (the "RealTime Stockholders") of RealTime Information Systems, PTY
("RealTime"), an Australian company engaged in the business of creating and
developing software for shop floor control, entered into a Stock Purchase
Agreement (the "Purchase Agreement"). Contemporaneous with the execution and
delivery of the Purchase Agreement, the Company and the RealTime Stockholders
closed the transaction contemplated by the Purchase Agreement. Under the terms
of the Purchase Agreement, the Company acquired all of the outstanding capital
stock of RealTime in exchange for (i) the payment by the Company of a total of
$10,000 and (ii) the issuance of 1,194,131 shares of the Company's common stock.
The transaction was accounted for under the purchase method of accounting. The
Company recorded goodwill of $2,676,387. As a result of these transactions, (a)
the Company owned all of the outstanding shares of capital stock of RealTime and
(b) Messrs. Ian Stone, Anthony Crouch and Grant Kelly were issued 571,550,
510,312, and 112,269 shares of CIMNET(R) common stock, respectively. In
addition, Messrs. Stone and Crouch executed employment agreements with the
Company. After developing the Company's Infolink product, the Company dissolved
RealTime in January 2001 and Mr. Stone resigned as an employee of the Company on
April 5, 2002.

          Realtime Information Systems, based in Raleigh, NC prior to the merger
with CIMNET(R), developed and marketed a configurable Manufacturing Execution
System (MES) known as Infolink. First released in 1995, Infolink was the first
fully configurable MES that required no custom code for implementation. Infolink
is a Windows(R) NT-based, client-server application that provides an extensive
range of capabilities including genealogy/traceability, downtime and waste
monitoring, job scheduling and Key Performance Indicators (KPIs). Realtime's
major focus included sales and marketing to the Food and Beverage and Consumer
Packaged Goods industries.

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 deliveries times
can only be accomplished by better integrating the factory floor with the rest
of the company's "front-office" systems.

          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) 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

                                       4
<PAGE>

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. The challenge is best
exemplified by Ford Motor Company's goal to sell automobiles over the Internet.
Ford plans to be able to build and deliver a new automobile to a customer's
Internet-communicated specifications in a matter of weeks, if not days. To
achieve this objective, manufacturers must develop better links between the
demand for its products on the front end (website, e-mail, etc.) 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, bio-tech, 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.

                                       5
<PAGE>

                            Total Addressable Market

                                 [CHART OMITTED]
Figure 1  ARC Advisory Group

          According to the latest ARC Advisory Group statistics, the Company's
total addressable market is expected to increase to approximately $5.2 billion
in 2006, a compound annual growth rate of 11% over the next several years (See
Figure 1). CIMNET(R)'s competitors include other independent software solutions
providers like the Company, as well as divisions of large organizations.

                                       6
<PAGE>

                                 CPM - Discrete

                                 [CHART OMITTED]
Figure 2  ARC Advisory Group

          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.

                                       7
<PAGE>

                                 CPM - Process

                                 [CHART OMITTED]
Figure 3  ARC Advisory Group

          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.

                                       8
<PAGE>

                       Enterprise Performance Management

                                 [CHART OMITTED]
Figure 4  ARC Advisory Group

          Figures 2 and 3 illustrate how the Company's core Manufacturing
Execution System (or Collaborative Production Management) solutions address an
existing $1.8 billion market that is expected to grow to $2.3 billion by 2006.
The Company's innovative new HMI/SCADA solution addresses a separate $500
million Human Machine INTERFACE MARKET (Figure 5) that is expected to grow
better than 7% per year. In mid- to late-2004, the Company will be introducing
its Business Intelligence module, a new solution targeted at the $1.8 billion
Enterprise Performance Management market. While these markets have traditionally
been served by their own set of focused solutions providers, the Company's NET
Factelligence(R) Suite product strategy intends to unify them. As the
manufacturing sector recovers and competitive pressures mount, overall spending
on total factory floor automation software spending is expected to increase at
an 11% rate.

                                       9
<PAGE>

                            Human Machine Interface

                                 [CHART OMITTED]
Figure 5  ARC Advisory Group

          The factory floor automation 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 - 2003 appears to have
stabilized. In addition, it appears companies are lifting the IT spending
moratorium that severely constrained technology spending the last few years.

          Technology infrastructure that can reduce costs and improve
competitiveness is experiencing renewed demand.

          This confluence of events is creating a `Perfect Storm' of opportunity
for factory automation software solutions providers with leading edge products
that are easy to implement, simple to operate and provide better control of the
factory floor.

          The competitive pressures on manufacturers has intensified and is on
the precipice of creating a tidal wave of 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 answer to their need to improve their competitiveness.

Sales and Marketing

          In 2004, the Company plans to substantially change its sales and
marketing approach. The Company's new marketing strategy will capitalize on:

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<PAGE>

     1)   The strength of its new, industry-leading .NET Factelligence(R) Suite,

     2)   An increased number of stand-alone software solutions, such as
          HMI/SCADA, MES and Business Intelligence facilitated by the Company's
          modular .NET Factelligence(R) Suite packaging,

     3)   Products targeted to a broader range of customer budgets, primarily
          oriented towards introductory products selling for considerably less
          than the cost of a historical Company implementation, and,

     4)   Market disruptions in the software solution distribution network being
          created by the vertical integration plans of some of the industry's
          most prominent competitors.

          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.

          A representative CIMNET(R) software sale may typically cost between
$100,000 and $500,000, or more, per site. However, the customer may ultimately
spend five times that amount in new hardware, integration services and other
ancillary and complementary technology expenses required to effect an
implementation. Because the purchase of an MES system frequently entails a
significant customer investment, the Company's sales cycle can range from six to
eighteen months. CIMNET(R) has seen the average sales cycle increase to an
average of 12 months over the last year, due in part to the recent economic
conditions affecting the manufacturing sector.

          The Company's marketing strategy is to introduce its .NET
Factelligence(R) Suite and its constituent software solution modules quickly and
broadly to the market. The marketing plan will significantly expand the
distribution network and market the .NET Factelligence(R) Suite in both packaged
form (where a customer would buy all of the constituent component MES, HMI/SCADA
and BI modules) as well as in limited form, such as individual modules, or
limited number of seat licenses. The availability of the set of modules
available in modular form will provide the Company with software solutions at
price points that appeal to manufacturers with a limited factory floor
automation budget, but which generally make a much quicker purchase decision.

          The Company will expand its marketing reach utilizing a unique
multi-channel distribution strategy consisting of: (1) an expanded and
strengthened direct sales force; (2) a number of new strategic
alliances/partnership agreements with factory automation software providers and;
(3) a completely new 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.

                                       11
<PAGE>

          The Company plans to expand its direct sales presence in 2004 by
adding one or two Country Managers to establish a presence in the South
American, European and Asian markets. In addition, the Company believes it will
need four additional salespeople/managers in the United States, geographically
dispersed, to manage new sales opportunities and to manage the various
reseller's relationships in those territories.

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, new releases on physical media on an
average of two times per year, 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.

          As of March 30, 2004, we had 14 employees and 1 contract developer
engaged in research and development activities. During the years ended December
31, 2003, 2002, and 2001, we spent $1,621,835, $2,004,906, and $1,963,929,
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."

                                       12
<PAGE>

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(R) 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(R) products. For example
CIMNET's(R) competitors at the DNC market include InterCim, Greco Systems and
Predator. In the MES marketspace, CIMNET's(R) key competitors include Camstar,
Datasweep, Wonderware, 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.

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.

                                       13
<PAGE>

          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.

          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, 2004, we had 24 employees, including 14 in research
and development of new software, and implementation; 6 in sales and marketing; 1
in developing corporate partnerships and strategic alliances, and 3 in
operations and order processing. In addition we have 1 consultant working on
research and development of new software.

                                       14
<PAGE>

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, 2003 and 2002, we
reported a net loss of $2,052,396 and $789,254, respectively. Through December
31, 2003, our accumulated deficit equaled $3,002,737. Although we reported a net
profit during the 2001 fiscal year, we cannot be certain that we will return to
profitability in the future. Failure to return to profitability 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. 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.

          The Demand For Manufacturing Software Has Weakened Significantly And
Demand Will Likely Remain Weak For Some Time Because Of The Current Economic
Climate. The market for our manufacturing software has changed rapidly over the
last two years. The market for advanced manufacturing automation software
expanded dramatically during 2000 and part of 2001, but declined significantly
in 2002 and 2003. Since the second half of 2001, many 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 that existed
during the economic expansion that stalled in 2001. This trend has worsened for
some companies following the September 11, 2001 terrorist attacks in the United
States and the accounting scandals involving Enron, Worldcom and other
companies. If companies continue to cancel or delay their business and
technology initiatives because of the current economic climate, or for other
reasons, our business, financial condition and results of operations will
continue to 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 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, 2003, one customer accounted for more than 24% of our total revenue
and during the year ended December 31, 2002 the same customer accounted for
approximately 34% 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.

                                       15
<PAGE>

          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.

          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.

                                       16
<PAGE>

          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, and Anthony Crouch our Chief Technology Officer. The loss of the
services of Mr. Richardson or Mr. Crouch 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.

          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.

                                       17
<PAGE>

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.

          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

                                       18
<PAGE>

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 limited 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.

          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

                                       19
<PAGE>

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 46.7% 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.

          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

                                       20
<PAGE>

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. We believe that our current facility is adequate to meet our
current business requirements, and that suitable additional space will be
available as needed. The building is owned by John D. Richardson, our founder,
Chief Executive Officer and Chairman of the Board and leased on a year to year
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.

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, 2003.

                                       21
<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, 2003
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
                      ----      ---                              ----      ---
       2003                                       2002
------------------                         ------------------

Quarter ended                              Quarter ended
March 31, 2003        $ .75    $ .43       March 31, 2002        $2.30    $1.55

Quarter ended                              Quarter ended
June 30, 2003         $ .75    $ .43       June 30, 2002         $1.80    $1.30

Quarter ended                              Quarter ended
September 30, 2003    $ .80    $ .65       September 30, 2002    $1.18    $0.57

Quarter ended                              Quarter ended
December 31, 2003     $1.55    $ .65       December 31, 2002     $1.01    $0.41

          On March 26, 2004, the final quoted prices as reported by the OTC
Bulletin Board was $.90 for each share of Common Stock. As of March 30, 2004,
there were 6,553,859 shares of Common Stock outstanding, held of record by
approximately 75 record holders.

Equity Compensation Plan Information

          Information regarding equity compensation plans, including stockholder
approved plans and non-stockholder approved plans is set forth in the Company's
proxy statement to be filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934.

                                       22
<PAGE>

Recent Sales of Unregistered Securities

          During the year ended December 31, 2003, the Company sold the
following equity securities that were not registered under the Securities Act of
1933, as amended:

          In November, 2003, the Company issued in a private transaction
pursuant to Section 4(2) of the Securities Act of 1933, as amended, 161,538
shares of its Common Stock to Lipman Capital Group, Inc. in connection with its
cashless exercise of a warrant issued to Lipman Capital in January, 2001. Lipman
Capital entered into a Market Access Program Marketing Agreement with the
Company in January, 2001 pursuant to which Lipman Capital provided the Company
with investor relations services.

          In December, 2003, the Company issued in a private transaction
pursuant to Section 4(2) of the Securities Act of 1933, as amended, 100,000
shares of common stock and 100,000 common stock purchase warrants to a partner
of the Company's outside law firm for an aggregate purchase price of $75,000
which was paid in cash. The warrants contain cashless exercise and certain
customary anti-dilution provisions. The warrants are exercisable at any time
during a ten (10) year period ending on December 31, 2013 at an exercise price
of $1.00 per share.

Item 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS 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.

RESULTS OF OPERATIONS

Year Ended December 31, 2003 Compared To Year Ended December 31, 2002

          Net Sales for the year ended December 31, 2003 were $2,345,894, a
decrease of 43.5% or $1,806,614 under net sales for the year ended December 31,
2002. This decrease is due to the down-turn in the manufacturing market place,
CIMNET(R) not having enough available capital to do effective marketing and the
result of reduced orders for our Manufacturing Execution System (MES) software
from one major customer. Sales to this customer were $567,434 and $1,391,831 for
the years ending December 31, 2003 and 2002 respectively.

                                       23
<PAGE>

          Costs of goods sold for 2003 were $280,077 compared to $432,159 for
2002, a decrease of $152,082 or 35.2%. This decrease in costs of goods sold is
related to the decrease in net sales of 43.5% and to the related decrease in
costs associated with the engagement of outside field engineers for the
implementation of the Company's software products.

          Gross Profit for 2003 was $2,065,817 compared to $3,720,349 for 2002,
a decrease of $1,654,532 or 44.5%. This decrease is primarily due to the
decrease in net sales. The percentage of cost of goods sold was 11.9% of net
sales in 2003 as compared to 10.4% of net sales in 2002.

          Selling, general and administrative expenses for 2003 were $2,275,973
or 97.0 % of net sales compared to $3,183,885 or 76.7% of net sales, for 2002.
Specifically, the increase in selling, general and administrative expenses as a
percentage of net sales is due to the decrease by 43.5% in net sales in 2003. In
terms of the net change there was a decrease of $907,912 or 28.5% in selling,
general and administrative expenses in 2003 versus that of 2002. This decrease
is due to cost cutback measures taken by the Company in response to the decrease
in revenue. The decrease is primarily attributable to the changes in the
following categories: salaries decreased by $407,044 and employee benefits
decreased by $31,861, both due to a decrease in the number of employees;
commissions decreased by $36,440 due to the decrease in sales; advertising costs
decreased by $224,109 due to cut backs in marketing; travel and entertainment
costs decreased by $101,391 due to reductions in travel and entertainment; trade
show expenses decreased by $95,440 as a result of the Company attending less
trade shows and the decrease in the associated expenses for these shows.

          Stock compensation relating to employee compensation, consulting and
legal services decreased by $30,911, which resulted from a decrease in the fair
market value and the number of options that vested during 2003.

          Research and development costs remained high in comparison to sales as
we remain dedicated to providing world class software. In 2003 development costs
were $1,621,835 compared to $2,004,906 in 2002, a decrease of $383,071. This
decrease is primarily due to previously independently employed contractors being
either directly employed by the Company in 2003 and a shift to develop .NET
infrastructure with our partner in South Africa.

          Loss from operations for 2003 was ($1,959,365) compared to
($1,626,727) in 2002, an increase of $332,628. This increased loss is
predominantly due to the previously discussed decrease in net sales while
maintaining an aggressive development schedule.

                                       24
<PAGE>

          Interest expense for 2003 was $12,621 or 0.5% of net sales, compared
to interest expense of $19,821 or 0.5% of net sales for 2002. In 2003, other
income (loss) included a realized loss on the sale of securities of ($176,006)
or 7.5% of net sales and rental revenue of $52,565 or 2.2% of net sales. Other
income in 2003 also included interest earned and dividend income, in the amount
of $6,675 or 0.3% of net sales, on the short term investments and cash balance
held with the bank. In 2002, other income included a realized gain on the sale
of securities of $83,387 or 2.0% of net sales and rental revenue of $52,565 or
1.3% of net sales, in addition to interest earned, in the amount of $13,272 or
0.3% of net sales, on the cash balance held with the bank.

          The income tax benefit for 2003 was ($36,357) compared to ($708,070)
in 2002. The income tax benefit recognized during 2003 has been reduced by an
increase in the valuation allowance of $906,248. This valuation allowance was
increased 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.

          Net loss for 2003 was ($2,052,396) or ($0.35) per share of common
stock (basic and diluted) as compared to a net loss of ($789,254) or ($0.15) per
share (basic and diluted) of common stock in 2002. The increased loss is
primarily attributable to lower revenues versus the prior year, as previously
noted, as well as the recording of a valuation allowance associated with the
Company's deferred tax assets, primarily attributable to net operating loss
carry-forwards. Based upon the operating results of the past two years, it has
been determined that a valuation allowance is appropriate as of December 31,
2003, however, the necessity to carry all or a portion of this allowance will be
considered as circumstances change over the coming periods.

Year Ended December 31, 2002 Compared To Year Ended December 31, 2001

          Net Sales for the year ended December 31, 2002 were $4,152,508, a
decrease of 50.8% or $4,284,075 over net sales for the year ended December 31,
2001. This decrease is the result of reduced orders for our Manufacturing
Execution System (MES) software from one major customer, a significant down-turn
in the manufacturing marketplace and management's decision to use outside
integrators as we move the company to a pure software development and support
company. Sales to this customer were $1,391,831 and $6,210,047 for the year
ending December 31, 2002 and 2001 respectively.

          Costs of goods sold for 2002 was $432,159 compared to $1,230,589 for
2001, a decrease of $798,430 or 64.9%. This decrease in costs of goods sold is
related to the decrease in net sales by 50.8% and to the related decrease in
costs associated with the engagement of outside field engineers for the
implementation of the Company's software products.

          Gross Profit for 2002 was $3,720,349 compared to $7,205,994 for 2001,
a decrease of $3,485,645 or 48.4%. This decrease is primarily due to the
decrease in net sales. The percentage of cost of goods sold was 10.4% of net
sales in 2002 as compared to 14.6% of net sales in 2001. This decrease is due to

                                       25
<PAGE>

the related substantial decrease in costs associated with the engagement of
outside field engineers for the implementation of the Company's software
products.

          Selling, general and administrative expenses for 2002 were $3,183,885
or 76.7 % of net sales compared to $2,562,061 or 30.4% of net sales, for 2001.
Specifically the changes in the following categories were primarily attributable
to these increases: salaries increased by $225,243 and employee benefits
increased by $18,482, both due to an increase in the number of employees, and
commission expense decreased by $151,602 due to the decrease in gross revenue.
Advertising costs increased by $156,731 due to the Company's marketing efforts
for its new product, "Factelligence(R) ". Travel and entertainment costs
increased by $87,204 due to traveling to trade shows, and traveling for
promotion of the new product, "Factelligence(R) ". Trade show expenses increased
by $96,575 as a result of the Company attending several trade shows and the
associated expenses for these shows. Depreciation expense increased by $68,858
as a result of the Company's purchase of a partial ownership interest in an
aircraft at the end of 2001 and other property and equipment acquired during
2002.

          Stock compensation relating to employee compensation, consulting and
legal services decreased by $221,972. This decrease is attributable to an
amendment to a common stock purchase warrant granted to a marketing firm during
2002. As a result, the Company expensed $52,000 relating to the issuance of such
common stock purchase warrants during 2002 as compared to $277,297 for the
issuance of such warrants in 2001.

          Research and development in 2002 was $2,004,906 or 48.3% of net sales
compared to $1,963,929 or 23.3% of net sales in 2001. The primary reason for
this increase is due to salaries increasing by $368,252 and employee benefits
increasing by $5,149. This is due to an increase in the number of software
developers engaged in the design of the Company's new product, "Factelligence(R)
". Other research and development expenses decreased by $337,782 as compared to
2001. This decrease is due to certain independent contractors previously being
engaged as independent contractors being directly employed by the Company in
2002.

          Commencing in 2002, the Company is no longer amortizing goodwill.
Amortization expense for 2001 was $178,424 or 2.1% of net sales. This change was
attributable to the Company's adoption of Statement of Financial Accounting
Standards No. 142, "Goodwill and Other Intangible Assets", under which the
Company no longer amortizes goodwill.

          Loss from operations for 2002 was ($1,626,727) compared to income of
$2,121,323 in 2001, a decrease of $3,748,050. This decrease is predominantly due
to the previously discussed increase in operating expenses along with the
decrease in net sales.

          Interest expense for 2002 was $19,821 or 0.5% of net sales, compared
to interest expense of $13,994 or 0.2% of net sales for 2001. In 2002, other
income included a realized gain on the sale of securities of $83,387 or 2.0% of
net sales and rental revenue of $52,565 or 1.3% of net sales, in addition to
interest earned, in the amount of to $13,272 or 0.3% of net sales, on short term
investments and cash balances held with the bank. In 2001, other income included
a realized gain on the sale of securities of $41,740 or 0.50% of net sales and
interest earned in the amount of $21,379 or 0.30% of net income on cash balances
held with the bank. There was no rental income in 2001.

                                       26
<PAGE>

          Provision (benefit) for income taxes for 2002 was ($708,070) compared
to $788,688 in 2001, due primarily to the fact that the Company had a net loss
in 2002.

          Net loss for 2002 was ($789,254) or ($0.15) per share of common stock
as compared to net income of $1,381,760 or $0.22 per share of common stock in
2001.

Liquidity and Capital Resources

          At December 31, 2003, the Company had current assets of $1,164, 963
versus $2,357,462 at December 31, 2002. This reduction is the result of various
fluctuations, the most significant of which is the decrease in accounts
receivable of approximately $753,000, attributable primarily to the decrease in
revenues versus those of the prior year. The remainder of the difference is
primarily attributable to a decrease in income taxes receivable of approximately
$275,000 related to refunds associated with net operating loss carry-backs and
less amounts being available for such carry-backs related to the loss for the
year ended December 31, 2003. Additionally, a full valuation allowance has been
recorded as of December 31, 2003, associated with deferred tax assets, due to
the Company's recent trend in operating losses, thus accounting for a decrease
in current assets of approximately $272,000 versus that of the prior year.
Current liabilities are $1,733,376 at December 31, 2003 versus $1,210,510 at
December 31, 2002. This increase is primarily attributable to borrowings on the
Company's available line of credit in the amount of $331,000 at December 31,
2003, with no such borrowings at December 31, 2002. Also, an additional $80,000
in dividends payable was accrued on the Company's preferred stock versus that
accrued at December 31, 2002, and deferred income due to an increase in
prepayments on services to be performed as of December 31, 2003 in the amount of
approximately $77,000 is attributable to the remainder of the increase in
current liabilities at December 31, 2003.

          At December 31, 2002, the Company had current assets of $2,357,462
compared to $4,257,896 at December 31, 2001. This decrease is primarily due to a
decrease of $975,328 in cash to subsidize the increase in operating costs, a
decrease of $265,417 in the value of available for sale securities as a result
of the decrease in the market value of such securities, and a $1,173,371
decrease in accounts receivable, primarily as a result of the reduced sales to
one customer in 2002. Current liabilities decreased by $604,036 in 2002 from
2001. This decrease is due to the paying down of accounts payable with cash
provided from collections on accounts receivable, the decrease in deferred
income of $211,733 is due to a significant contract not being present at
December 31, 2002 that was ongoing at December 31, 2001 and the decrease in
income tax liability is due to the tax payments made during 2002, the current
year loss and the expected benefits of research and development tax credits to
be received.

                                       27
<PAGE>

Operating Activities

          Cash used in operations for fiscal 2003 and 2002 was ($294,091) and
($619,077), respectively. The decrease in cash used by operations in 2003 versus
that of 2002 was primarily attributable to income tax refunds received during
2003 of approximately $533,000 and the receipt of approximately $77,000 more
prepayments in the form of deferred income than in 2002 as previously noted.
These sources of cash were off-set by various other smaller fluctuations. It
should be noted, however, that approximately $753,000 of cash was provided by
accounts receivables which was primarily attributable to decreased revenues in
2003 versus that of 2002.

          Cash provided by (used in) operations for fiscal 2002 and 2001 was
($619,077) and $852,917, respectively. The decrease in cash provided by
operations in 2002 was primarily due a decrease in net income of $2,171,014 for
the year, over 2001.

Investing Activities

          Investing activities provided (used) $38,847 and ($318,958) in 2003
and 2002, respectively. During 2003, the Company reduced its purchases of
property and equipment, reducing its total to $9,614 and made no purchases of
securities. In 2002 the Company purchased and constructed $249,848 of property
and equipment. The Company increased its investment in a limited partnership by
$25,000 in both 2003 and 2002. The Company had $73,461 in cash related to net
transactions in available for sale securities in 2003; in contrast, the company
consumed $44,110 in cash related to net transactions in available for sale
securities during 2002.

Financing Activities

          Financing activities provided (used) $275,060 in 2003 compared to
($37,793) in 2002, an increase of $312,353. This is attributable to the
borrowings on the Company's line of credit in the amount of $331,000, net of
payments on its outstanding long term debt of approximately $56,000.

Capital Resources

          The Company has a line of credit with its bank. As of December 31,
2003, the Company had borrowed $331,000 from the line of credit and had $169,000
of unused credit available.

          The Company has no material commitments for capital expenditures and
believes that its cash from operations, existing balances and available credit
line will be sufficient to satisfy the needs of its operations and its capital
commitments for the foreseeable future. Specifically, the Company has taken
steps during 2003 to control costs and to down-size its personnel levels in
light of the current economy. However, if the need arose, the Company would seek
to obtain capital or equity financing sources.

                                       28
<PAGE>

Application of Critical Accounting Policies:

          Disclosure of the Company's significant accounting policies is
included in Note 2 to the 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:

          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.

          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."

          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, 2003.

          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

                                       29
<PAGE>

consideration of the above factors were immaterial and, therefore no software
development costs have been capitalized by the Company during 2003.

          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.

          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 is currently receiving much
scrutiny. Should the Company be required to account for such employee equity
instruments in a different manner, such a change could have a material impact to
the results of operations for the Company.

Item 7.   FINANCIAL STATEMENTS.
          --------------------

          See Financial Statements following Item 15 of this Annual Report on
Form 10-KSB.

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

          None.

                                       30
<PAGE>

                                    PART III
                                    --------

Item 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT 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.

Item 13.  EXHIBITS, LISTS AND REPORTS ON FORM 8-K.
          ---------------------------------------

          (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.

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.

                                       31
<PAGE>

          (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.

                                       32
<PAGE>


                                  CIMNET, INC.

                                FINANCIAL REPORT

                                DECEMBER 31, 2003

<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
TABLE OF CONTENTS

                                                                        PAGE NO.

FINANCIAL STATEMENTS:

     Independent Auditor's Report                                          1

     Balance Sheets                                                        4

     Statements of Operations                                              3

     Statements of Changes in Stockholders' Equity                         4

     Statements of Cash Flows                                              5

     Notes to Financial Statements                                         7

<PAGE>

                          INDEPENDENT AUDITOR'S REPORT


To the Shareholders
Cimnet, Inc.
Robesonia, Pennsylvania


         We have audited the accompanying balance sheets of Cimnet, Inc. as of
December 31, 2003 and 2002, 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 auditing standards generally
accepted in the United States of America. Those standards require than we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe 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, 2003 and 2002, 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


Reading, Pennsylvania
January 15, 2004

<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                                      December 31,
                                                                -----------------------
                                                                   2003         2002
                                                                ----------   ----------
<S>                                                             <C>          <C>
CURRENT ASSETS

  Cash and cash equivalents                                     $  137,641   $  117,825
  Securities available for sale                                    201,016      209,598
  Accounts receivable, net of allowance for doubtful accounts
    2003 $17,022; 2002 $53,493                                     333,108    1,049,345
  Other receivable                                                  75,000            0
  Inventories                                                       94,841      107,030
  Prepaid expenses                                                  57,254       60,853
  Income taxes receivable                                          266,103      540,818
  Deferred income tax assets                                             0      271,993
                                                                ----------   ----------
    Total Current Assets                                         1,164,963    2,357,462
                                                                ----------   ----------

PROPERTY AND EQUIPMENT, NET                                        575,865      708,730
                                                                ----------   ----------

GOODWILL                                                         2,364,145    2,364,145
                                                                ----------   ----------

OTHER ASSETS                                                        77,500       52,500
                                                                ----------   ----------
    Total Assets                                                $4,182,473   $5,482,837
                                                                ==========   ==========
</TABLE>

See notes to financial statements.
--------------------------------------------------------------------------------
                           1        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants

<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                           December 31,
                                                                   --------------------------
                                                                      2003           2002
                                                                   -----------    -----------
<S>                                                                <C>            <C>
CURRENT LIABILITIES

  Line of credit                                                   $   331,000    $         0
  Current portion of long-term debt                                     59,067         55,479
  Accounts payable                                                     103,287         84,792
  Accrued expenses                                                      68,968         74,838
  Accrued income taxes                                                  19,077              0
  Dividends payable on preferred stock                                 186,000        106,000
  Deferred income                                                      965,977        889,401
                                                                   -----------    -----------
    Total Current Liabilities                                        1,733,376      1,210,510

LONG-TERM DEBT, NET OF CURRENT PORTION                                 127,705        187,233

DEFERRED INCOME TAX LIABILITY                                                0         74,565
                                                                   -----------    -----------

    Total Liabilities                                                1,861,081      1,472,308
                                                                   -----------    -----------

STOCKHOLDERS' EQUITY

  Common stock, $.0001 par value; 15,000,000 shares authorized;
    shares issued and outstanding 2003 6,553,859; 2002 6,292,321           655            629
  Preferred stock, $.0001 8% cumulative convertible; 5,000,000
    shares authorized; 746,965 shares issued and outstanding                75             75
  Paid-in capital                                                    5,557,761      5,391,109
  Accumulated deficit                                               (3,002,737)      (825,663)
  Accumulated other comprehensive loss                                (174,481)      (415,366)
  Deferred stock compensation                                          (59,881)      (140,255)
                                                                   -----------    -----------
    Total Stockholders' Equity                                       2,321,392      4,010,529
                                                                   -----------    -----------
    Total Liabilities and Stockholders' Equity                     $ 4,182,473    $ 5,482,837
                                                                   ===========    ===========
</TABLE>

--------------------------------------------------------------------------------
                           2        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants

<PAGE>
<TABLE>
<CAPTION>

CIMNET, INC.
--------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS

                                                                       Years Ended December 31,
                                                                      --------------------------
                                                                         2003           2002
                                                                      -----------    -----------
<S>                                                                   <C>            <C>
NET SALES                                                             $ 2,345,894    $ 4,152,508

COST OF GOODS SOLD                                                        280,077        432,159
                                                                      -----------    -----------
    Gross Profit                                                        2,065,817      3,720,349
                                                                      -----------    -----------

OPERATING EXPENSES

  Selling, general and administrative                                   2,275,973      3,183,885
  Stock compensation - employees, consulting and legal services           127,374        158,285
  Research and development                                              1,621,835      2,004,906
                                                                      -----------    -----------
    Total Operating Expenses                                            4,025,182      5,347,076
                                                                      -----------    -----------
    Operating Loss                                                     (1,959,365)    (1,626,727)
                                                                      -----------    -----------

OTHER INCOME (EXPENSES)

  Interest expense, net                                                    (5,947)        (6,549)
  Rental income                                                            52,565         52,565
  Realized gain (loss) on the sale of available for sale securities      (176,006)        83,387
                                                                      -----------    -----------
    Total Other Income (Expenses)                                        (129,388)       129,403
                                                                      -----------    -----------

    Loss before Income Tax Benefit                                     (2,088,753)    (1,497,324)

INCOME TAX BENEFIT                                                        (36,357)      (708,070)
                                                                      -----------    -----------

    Net Loss                                                          $(2,052,396)   $  (789,254)
                                                                      ===========    ===========

NET LOSS PER COMMON SHARE - BASIC                                     $     (0.35)   $     (0.15)
                                                                      ===========    ===========

NET LOSS PER COMMON SHARE - DILUTED                                   $     (0.35)   $     (0.15)
                                                                      ===========    ===========
</TABLE>

See notes to financial statmeents.
--------------------------------------------------------------------------------
                           3        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants

<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years Ended December 31, 2003 and 2002

<TABLE>
<CAPTION>

                                                  Common Stock               Preferred Stock                        Retained
                                           --------------------------   -------------------------     Paid-in       Earnings
                                              Shares        Amount        Shares        Amount        Capital       (Deficit)
                                           -----------    -----------   -----------   -----------   -----------    -----------
<S>                                          <C>          <C>               <C>       <C>           <C>            <C>
BALANCE, DECEMBER 31, 2001                   6,282,321    $       628       746,965   $        75   $ 5,321,764    $    88,269


  Comprehensive loss:

    Net loss                                         0              0             0             0             0     (2,052,396)
    Change in unrealized loss on
      available for sale securities                  0              0             0             0             0              0


    Total Comprehensive Loss                (1,191,015)


  Stock compensation expense                         0              0             0             0             0              0
  Consulting and legal service expense,
    fair value of options and warrants
    granted                                          0              0             0             0        77,918              0
  Change in fair value of stock warrants
    issued for sales commitments                     0              0             0             0       (55,000)             0
  Issuance of stock options                          0              0             0             0         1,250              0
  Dividends and accretion on preferred
    stock                                            0              0             0             0        44,678       (124,678)
  Exercise of stock options                     10,000              1             0             0           499              0
                                           -----------    -----------   -----------   -----------   -----------    -----------

BALANCE, DECEMBER 31, 2002                   6,292,321            629       746,965            75     5,391,109       (825,663)


  Comprehensive loss:

    Net loss                                         0              0             0             0             0     (2,052,396)
    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 options and warrants
    granted                                          0              0             0             0        47,000              0
  Issuance of common stock                     100,000             10             0             0        74,990              0
  Dividends and accretion on preferred
    stock                                            0              0             0             0        44,678       (124,678)
  Exercise of stock warrants                   161,538             16             0             0           (16)             0
                                           -----------    -----------   -----------   -----------   -----------    -----------

BALANCE, DECEMBER 31, 2003                   6,553,859    $       655       746,965   $        75   $ 5,557,761    ($3,002,737)
                                           ===========    ===========   ===========   ===========   ===========    ===========


(conttinued)
                                            Accumulated
                                               Other        Deferred
                                           Comprehensive     Stock
                                               Loss       Compensation       Total
                                           -------------  -------------   -----------
BALANCE, DECEMBER 31, 2001                  ($   13,605)   ($  219,372)   $ 5,177,759
                                                                          -----------

  Comprehensive loss:

    Net loss                                          0              0       (789,254)
    Change in unrealized loss on
      available for sale securities            (401,761)             0       (401,761)
                                                                          -----------

    Total Comprehensive Loss                                               (1,191,015)
                                                                          -----------

  Stock compensation expense                          0         80,367         80,367
  Consulting and legal service expense,
    fair value of options and warrants
    granted                                           0              0         77,918
  Change in fair value of stock warrants
    issued for sales commitments                      0              0        (55,000)
  Issuance of stock options                           0         (1,250)             0
  Dividends and accretion on preferred
    stock                                             0              0        (80,000)
  Exercise of stock options                           0              0            500
                                            -----------    -----------    -----------

BALANCE, DECEMBER 31, 2002                     (415,366)      (140,255)     4,010,529
                                                                          -----------

  Comprehensive loss:

    Net loss                                          0              0     (2,052,396)
    Change in unrealized loss on
      available for sale securities             240,885              0        240,885
                                                                          -----------

  Total Comprehensive Loss                                                 (1,811,511)
                                                                          -----------

  Stock compensation expense                          0         80,374         80,374
  Consulting and legal service expense,
    fair value of options and warrants
    granted                                           0              0         47,000
  Issuance of common stock                            0              0         75,000
  Dividends and accretion on preferred
    stock                                             0              0        (80,000)
  Exercise of stock warrants                          0              0              0
                                            -----------    -----------    -----------

BALANCE, DECEMBER 31, 2003                  ($  174,481)   ($   59,881)   $ 2,321,392
                                            ===========    ===========    ===========
</TABLE>

See notes to financial statements.
--------------------------------------------------------------------------------
                           4        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                Years Ended December 31,
                                                                ------------------------
                                                                   2003           2002
                                                                -----------    ----------
<S>                                                                 <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES

  Net loss                                                      $(2,052,396)   $ (789,254)

  Adjustments to reconcile net loss to net cash
    used in operating activities:

    Depreciation and amortization                                   142,479       141,442
    Realized (gain) loss  on sale of securities                     176,006       (83,387)
    Provision for doubtful accounts                                 (36,471)       (6,507)
    Provision for deferred income taxes                             197,428          (240)
    Stock warrants - sales commitments                                    0       (55,000)
    Stock options - employees                                        80,374        80,367
    Stock options and warrants - consulting and legal services       47,000        77,918
    (Increase) decrease in assets:
      Accounts receivable                                           752,708     1,179,878
      Inventories                                                    12,189        28,957
      Prepaid expenses                                                3,599        47,170
      Income taxes receivable                                       274,715      (540,818)
    Increase (decrease) in liabilities:
      Accounts payable                                               18,495      (248,008)
      Accrued expenses                                               (5,870)        2,215
      Accrued income taxes                                           19,077      (242,077)
      Deferred income                                                76,576      (211,733)
                                                                 ----------    ----------
    Net Cash Used in Operating Activities                          (294,091)     (619,077)
                                                                 ----------    ----------

CASH FLOWS FROM INVESTING ACTIVITIES

  Investment in limited partnership                                 (25,000)      (25,000)
  Purchase of property and equipment                                 (9,614)     (249,848)
  Purchase of available for sale securities                               0    (1,288,992)
  Proceeds from the sale of available for sale securities            73,461     1,244,882
                                                                 ----------    ----------
    Net Cash Provided by (Used in) Investing Activities              38,847      (318,958)
                                                                 ----------    ----------
</TABLE>

See notes to financial statements.
--------------------------------------------------------------------------------
                           5        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
                                                                 Years Ended December 31,
                                                                 ------------------------
                                                                    2003          2002
                                                                 ----------    ----------
<S>                                                                 <C>           <C>
CASH FLOWS FROM FINANCING ACTIVITIES

  Principal payments on long-term borrowings                     $  (55,940)   $  (37,793)
  Proceeds on exercise of stock options and stock warrants                0           500
  Net borrowings on line of credit                                  331,000             0
                                                                 ----------    ----------
    Net Cash Provided by (Used in) Financing Activities             275,060       (37,293)
                                                                 ----------    ----------

    Net Increase (Decrease) in Cash and Cash Equivalents

CASH AND CASH EQUIVALENTS - BEGINNING                               117,825     1,093,153
                                                                 ----------    ----------

CASH AND CASH EQUIVALENTS - ENDING                               $  137,641    $  117,825
                                                                 ==========    ==========

SUPPLEMENTARY CASH FLOWS INFORMATION

  Interest paid                                                  $   12,621    $   19,821
                                                                 ==========    ==========

  Income taxes paid                                              $        0    $  133,432
                                                                 ==========    ==========

  Income taxes refunded                                          $  532,375    $   59,075
                                                                 ==========    ==========

SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING
  AND FINANCING ACTIVITIES

  Issuance of employee stock options                             $        0    $    1,250
                                                                 ==========    ==========

  Purchase of equipment through seller financing                 $        0    $   21,338
                                                                 ==========    ==========

  Issuance of common stock and related other receivable          $   75,000    $        0
                                                                 ==========    ==========
</TABLE>

See notes to financial statements.
--------------------------------------------------------------------------------
                           6        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants

<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS

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's office is located in
         Robesonia, Pennsylvania, and the Company has sales throughout the
         United States and abroad. Approximately 86% and 82% of the sales for
         the years ended December 31, 2003 and 2002, 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 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."

--------------------------------------------------------------------------------
                           7        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants

<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

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.

              Securities

                  Securities classified as available for sale are those
                  securities that the Company intends to hold for an indefinite
                  period of time but not necessarily to maturity. Securities
                  available for sale are carried at fair value. Unrealized gains
                  or losses are included in other comprehensive income. Realized
                  gains or losses, determined on the basis of the cost of the
                  specific securities sold, are included in earnings.

              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 lesser of the life of the
                  lease or the lives of the improvements. An aircraft is being
                  amortized over seven years under the straight-line method 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

                  The Company is accounting for its 25% investment in Reading
                  Air Charter, LLC (RAC) by the equity method of accounting and
                  has included this amount in other assets at December 31, 2003
                  and 2002. Under this method, the net income of RAC is
                  recognized as income in the Company's income statements and
                  added to the investment account, and distributions received
                  from RAC are treated as a reduction of the investment account.
                  Allocation of RAC's profits is governed by a Partnership
                  Agreement, although it is generally based on the ownership
                  percentage of each of the partners. RAC's operations for the
                  periods ended December 31, 2003 and 2002 were not material.

--------------------------------------------------------------------------------
                           8        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              Other Assets (Continued)

                  Concurrent with entering this investment, the Company acquired
                  a 25% interest in an aircraft that is leased to RAC (see Note
                  9).

              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. The Company was also required to
                  complete a transitional impairment test within six months from
                  the date of adoption. During the second quarter of 2002, the
                  Company completed the transitional impairment test. The
                  estimated fair value of the Company exceeded its book value.
                  As a result, no write-down of goodwill was required as of
                  January 1, 2002. Additionally, such a review must be performed
                  on an annual basis and, based upon such review, management
                  determined that no write-down of goodwill was required as of
                  December 31, 2003 and 2002.

              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.

              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.

--------------------------------------------------------------------------------
                           9        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              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 $47,000 and $77,918 for the years ended
                  December 31, 2003 and 2002, 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 $80,374 and
                  $80,367 for the years ended December 31, 2003 and 2002,
                  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.

                  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>
                                                                            2003                   2002
                                                                        ------------            ----------
<S>                                                                     <C>                     <C>
                  Net loss:

                    As reported                                         $ (2,052,396)           $ (789,254)
                    Add stock based employee compensation expense
                      included in reported net loss, net of related
                      tax effects                                             80,374                80,367
                    Deduct total stock-based employee compensation
                      expense determined under fair value based
                      method for all awards, net of related tax
                      effect                                                (259,523)             (234,805)
                                                                        ------------            ----------
                    Pro forma                                           $ (2,231,545)           $ (943,692)
                                                                        ============            ==========

                  Net income per share of common stock, basic:
                     As reported                                        $      (0.35)           $    (0.15)
                     Pro forma                                          $      (0.37)           $    (0.17)

                  Net income per share of common stock, diluted:
                     As reported                                        $      (0.35)           $    (0.15)
                     Pro forma                                          $      (0.37)           $    (0.17)
</TABLE>

--------------------------------------------------------------------------------
                          10        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              Stock Based Compensation (Continued)

                  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
                  2003 and 2002: dividend yield of 0% for both years, expected
                  volatility of 87% and 94%, the average risk-free interest rate
                  of 2.99% and 2.89% for 2003 and 2002; and expected lives of
                  6.83 years for the directors and 7.0 years for consulting
                  options, in 2003 and 2002, respectively.

              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.

              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, 2003 and 2002 was $45,880 and $269,988,
                  respectively.

--------------------------------------------------------------------------------
                          11        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              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.

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

<TABLE>
<CAPTION>
                                                                                   Years Ended December 31,
                                                                                   ------------------------
                                                                                      2003          2002
                                                                                   ---------     ----------

<S>                                                                                <C>           <C>
                  Unrealized holding gains (losses) arising during the year        $  64,879     $ (309,528)
                  Reclassification adjustment for (gains) losses realized in
                    net income                                                       176,006        (83,387)
                                                                                   ---------     ----------

                  Net unrealized gains (losses)                                      240,885       (392,915)

                  Tax effect                                                               0         (8,846)
                                                                                   ---------     ----------

                    Net of Tax Amount                                              $ 240,885     $ (401,761)
                                                                                   =========     ==========
</TABLE>

              Recently Issued Accounting Standards

                  In November 2002, the Financial Accounting Standards Board
                  (FASB) issued FASB Interpretation No. 45 (FIN 45),
                  "Guarantor's Accounting and Disclosure Requirements for
                  Guarantees, Including Indirect Guarantees of Indebtedness of
                  Others." This Interpretation expands the disclosures to be
                  made by a guarantor in its financial statements about its
                  obligations under certain guarantees and requires the
                  guarantor to recognize a liability for the fair value of an
                  obligation assumed under certain specified guarantees. Under
                  FIN 45, the Company has a guarantee that requires disclosure
                  and is discussed in Note 13. Adoption of FIN 45 did not have a
                  significant impact on the Company's financial condition or
                  results of operations.

--------------------------------------------------------------------------------
                          12        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants

<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

              Recently Issued Accounting Standards (Continued)

                  In January 2003, the Financial Accounting Standards Board
                  issued FASB Interpretation No. 46, "Consolidation of Variable
                  Interest Entities, an Interpretation of ARB No. 51." FIN 46
                  was revised in December 2003. This Interpretation provides new
                  guidance for the consolidation of variable interest entities
                  (VIEs) and requires such entities to be consolidated by their
                  primary beneficiaries if the entities do not effectively
                  disperse risk among parties involved. The Interpretation also
                  adds disclosure requirements for investors that are involved
                  with unconsolidated VIEs. The disclosure requirements apply to
                  all financial statements issued after December 31, 2003. The
                  consolidation requirements apply to companies that have
                  interests in special purpose entities for periods ending after
                  December 15, 2003. Consolidation of other types of VIEs is
                  required in financial statements for periods ending after
                  December 15, 2004. The adoption of this Interpretation did not
                  have and is not expected to have an impact on the Company's
                  financial condition or results of operations.

                  In April 2003, the Financial Accounting Standards Board issued
                  Statement No. 149, "Amendment of Statement No. 133, Accounting
                  for Derivative Instruments and Hedging Activities." This
                  Statement clarifies the definition of a derivative and
                  incorporates certain decisions made by the Board as part of
                  the Derivatives Implementation Group process. This Statement
                  is effective for contracts entered into or modified and for
                  hedging relationships designated after June 30, 2003 and
                  should be applied prospectively. The provisions of the
                  Statement that relate to implementation issues addressed by
                  the Derivatives Implementation Group that have been effective
                  should continue to be applied in accordance with their
                  respective dates. Adoption of this standard did not have an
                  impact on the Company's financial condition or results of
                  operations.

                  In May 2003, the Financial Accounting Standards Board issued
                  Statement No. 150, "Accounting for Certain Financial
                  Instruments with Characteristics of both Liabilities and
                  Equity." This Statement requires that an issuer classify a
                  financial instrument that is within its scope as a liability.
                  Many of these instruments were previously classified as
                  equity. This Statement was effective for financial instruments
                  entered into or modified after May 31, 2003 and otherwise was
                  effective beginning July 1, 2003. The adoption of this
                  standard did not have an impact on the Company's financial
                  condition or results of operations.

--------------------------------------------------------------------------------
                          13        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 3 - SECURITIES

                  The amortized cost and approximate fair value of securities as
         of December 31, 2003 and 2002 is summarized as follows:

<TABLE>
<CAPTION>
                                                                     Gross            Gross
                                                                   Unrealized       Unrealized           Fair
                                               Amortized Cost        Gains            Losses             Value
                                               --------------      ----------       ----------           -----
<S>                                              <C>                <C>             <C>                <C>
          December 31, 2003
            Securities available for
              sale, equity securities            $ 375,497          $     0         $ (174,481)        $ 201,016
                                                 =========          =======         ==========         =========

          December 31, 2002
            Securities available for
              sale, equity securities            $ 624,964          $     0        $ (415,366)         $ 209,598
                                                 =========          =======        ==========          =========
</TABLE>

                  The gross realized gains on sales of available for sale
         securities totaled $-0- and $83,387 for the years ended December 31,
         2003 and 2002, respectively. The gross realized losses on sales of
         available for sale securities totaled $176,006 and $-0- for the years
         ending December 31, 2003 and 2002, respectively.

                  All of the Company's equity securities (consisting of common
         shares of one company) at December 31, 2003, have been in a continuous
         unrealized loss position of twelve months or more. Based upon a review
         of these equity securities, the Company believes that the holding
         losses are not other than temporary at this time. There will, however,
         continue to be reviews and evaluations conducted in the future as
         events and circumstances change.

NOTE 4 - PROPERTY AND EQUIPMENT

                  Property and equipment consisted of the following at December
         31, 2003 and 2002:

<TABLE>
<CAPTION>
                                                               2003                 2002               Estimated
                                                                                                     Useful Lives
                                                             -----------          -----------        ------------
<S>                                                          <C>                  <C>                <C>
         Furniture, fixtures and equipment                   $   700,572          $   690,958        3 - 10 years
         Aircraft - 25% interest                                 328,900              328,900          7 years
         Leasehold improvements                                  314,150              314,150        7 - 40 years
         Computer software                                        55,026               55,026          3 years
                                                             -----------          -----------
                                                               1,398,648            1,389,034

         Accumulated depreciation and amortization              (822,783)            (680,304)
                                                             -----------          -----------
                                                             $   575,865          $   708,730
                                                             ===========          ===========
</TABLE>

         Depreciation and amortization related to property and equipment
         amounted to $142,479 and $141,442 for the years ended December 31, 2003
         and 2002, respectively.

--------------------------------------------------------------------------------
                          14        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 5 - INCOME TAXES

         The benefit for income taxes for the years ended December 31, 2003 and
         2002 was as follows:

                                             2003                  2002
                                          ----------            ----------
              Federal:
                 Current                  $ (233,785)           $ (707,830)
                 Deferred                    197,428                  (240)
                                          ----------            ----------
                                          $  (36,357)           $ (708,070)
                                          ==========            ==========

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

<TABLE>
<CAPTION>
                                                                2003               2002
                                                             ----------         ----------
<S>                                                          <C>                <C>
              Pretax at statutory rate                       $ (710,176)        $ (509,090)
              State taxes, net of federal benefit              (180,884)           (75,754)
              Benefit of research and development credits             0           (143,414)
              Valuation allowance                               906,248             75,754
              Other                                             (51,545)           (55,566)
                                                             ----------         ----------
                                                             $  (36,357)        $ (708,070)
                                                             ==========         ==========
</TABLE>

                  Income tax expense includes $-0- and $32,854 in 2003 and 2002,
         respectively, of income tax expense related to net realized securities
         gains.

                  The net deferred tax asset for the years ended December 31,
         2003 and 2002 consists of the following:

<TABLE>
<CAPTION>
                                                                2003               2002
                                                             ----------         ----------
<S>                                                          <C>                <C>
          Deferred tax assets:

            Deferred stock compensation                      $  262,192         $  230,524
            Allowance for doubtful accounts                       6,707             21,076
            Accrued vacation                                     17,938             20,393
            Net operating loss carryforward                     743,713             75,754
                                                             ----------         ----------
                                                              1,030,550            347,747

            Valuation allowance                                (982,002)           (75,754)
                                                             ----------         ----------

              Total Deferred Tax Asset                           48,548            271,993

          Deferred tax liabilities,
            depreciation expense                                (48,548)           (74,565)
                                                             ----------         ----------

              Net Deferred Tax Asset                         $        0         $  197,428
                                                             ==========         ==========
</TABLE>

--------------------------------------------------------------------------------
                          15        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 5 - INCOME TAXES (CONTINUED)

                  The Company increased the valuation allowance by $906,248
         during 2003, based upon the 2003 results of operations. At December 31,
         2003, the Company has a federal net operating loss carryforward of
         approximately $1,200,000 for which a deferred tax asset was recorded,
         with a corresponding valuation allowance. This net operating loss
         carryforward expires in 2023. At December 31, 2003, the Company has
         state net operating loss carryforwards of approximately $3,400,000 for
         which a deferred tax asset was recorded, with a corresponding valuation
         allowance. The state net operating loss carryforwards expire in 2022
         and 2023.

                  The deferred tax amounts mentioned above have been classified
         on the accompanying balance sheets as of December 31, 2003 and 2002 as
         follows:

                                                             2003       2002
                                                            ------    ---------

                  Deferred tax assets, current              $    0    $ 271,993
                  Deferred tax liability, noncurrent             0      (74,565)
                                                            ------    ---------
                                                            $    0    $ 197,428
                                                            ======    =========

NOTE 6 - LINE OF CREDIT

                  The Company has a $500,000 line of credit with a bank.
         Interest is payable monthly at the bank's prime interest rate plus
         .50%. The balance of outstanding borrowings was $331,000 at December
         31, 2003. The line of credit expires on April 30, 2004. 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, 2003, however, a waiver
         of this covenant was obtained from the bank.

                  The Company had a $300,000 line of credit with a bank
         available at December 31, 2002. There were no outstanding borrowings at
         December 31, 2002. This line of credit expired on May 31, 2003. The
         Company did not renew this line of credit.

--------------------------------------------------------------------------------
                          16        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
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CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 7 - LONG-TERM DEBT

                  Long-term debt consisted of the following at December 31, 2003
         and 2002:

<TABLE>
<CAPTION>
                                                                               2003              2002
                                                                             ---------         ---------
<S>                                                                          <C>               <C>
         Note payable, representing 25% of an obligation
           outstanding, secured by an aircraft, payable in fixed
           monthly installments of $4,381 including interest at
           3.04% plus a variable per annum rate equal to the rate
           listed for "1-Month" Commercial Paper (4.04% at
           December 31, 2003) through August 2008                            $ 177,871         $ 222,106
         Note payable, secured by equipment, payable in fixed monthly
           principal installments of $889 plus interest at the
           bank's prime rate plus 0.5% (4.50% at December 31, 2003)
           through October 2004                                                  8,901            19,570
         Debt repaid during 2003                                                     0             1,036
                                                                             ---------         ---------
                                                                               186,772           242,712

         Current portion                                                       (59,067)          (55,479)
                                                                             ---------         ---------
                                                                              $127,705         $ 187,233
                                                                              ========         =========
</TABLE>

                  The future minimum payments required on the notes payable at
         December 31, 2003 are as follows:

                  2004                         $  59,067
                  2005                            48,293
                  2006                            50,281
                  2007                            29,131
                                               ---------
                                               $ 186,772
                                               =========

--------------------------------------------------------------------------------
                          17        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 8 - EARNINGS PER SHARE

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

<TABLE>
<CAPTION>
                                                                                 December 31,
                                                                        -----------------------------
                                                                          2003                 2002
                                                                        ------------      -----------
<S>                                                                     <C>               <C>
                  NET LOSS                                              $ (2,052,396)     $  (789,254)
                      Preferred stock dividends                              (80,000)         (80,000)
                       Preferred stock discount accretion                    (44,678)         (44,678)
                                                                        ------------      -----------
                   NET LOSS APPLICABLE TO COMMON STOCKHOLDERS           $ (2,177,074)     $  (913,932)
                                                                        ============      ===========

                  AVERAGE BASIC SHARES OUTSTANDING                         6,317,653        6,290,627
                       Assumed conversion of preferred stock                       0                0
                       Effect of dilutive options and warrants                     0                0
                                                                        ------------      -----------
                  AVERAGE DILUTED SHARES OUTSTANDING                       6,317,653        6,290,627
                                                                        ============      ===========

                  NET LOSS PER COMMON SHARE

                       Basic                                            $      (0.35)     $     (0.15)
                                                                        ============      ===========

                       Diluted                                          $      (0.35)     $     (0.15)
                                                                        ============      ===========
</TABLE>

                  A total of 1,677,500 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, 2003.

                  A total of 1,602,500 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, 2002.

NOTE 9 - 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, 2003 and 2002, the
         Company conducted transactions with the related party which were
         immaterial, both individually and in the aggregate.

                  The Company rents space from the Company's stockholders on a
         month-to-month basis. Rent expense for 2003 and 2002 relating to this
         arrangement was $120,000.

--------------------------------------------------------------------------------
                          18        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 9 - RELATED PARTY TRANSACTIONS (CONTINUED)

                  The Company owns a 25% interest in Reading Air Charter, LLC
         (RAC). During the years ended December 31, 2003 and 2002, the Company
         leased to RAC its portion of an aircraft for total rental income of
         $52,565 for each year.

                  The Company pays RAC a monthly fee for the use of RAC's
         services. Total fees paid to RAC during 2003 and 2002 were $78,000 per
         year.

NOTE 10 - 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, 2003 and 2002 were $31,757 and $32,654,
         respectively.

NOTE 11 - 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 are 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 are 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 and 2002 was $0.26. The grant date fair value of the
         warrants issued during 2001 was $0.50 per warrant. No warrants were
         granted during 2003. Total marketing expense related to the vested
         warrants amounted to $52,000 for the year ended December 31, 2002. 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 has been allocated to the fair value of the warrants,
         generating a discount on preferred stock that is being accreted over a
         period of three years. Such accretion was $44,678 for the years ended
         December 31, 2003 and 2002, 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 for $133,000.
         100,000 warrants vested on January 1, 2002 and the remaining 100,000
         warrants vested on January 1, 2003. These warrants are exercisable at
         $2.00 and $1.75 per warrant for the warrants that vested on January 1,
         2002 and 2003, respectively. The warrants expire three years from date
         of issuance. Net sales for the year ended December 31, 2002 include
         additional income of $55,000 for sales discounts relating to the change
         in the fair value of the warrants that vested on January 1, 2003, from
         the fair value calculated on the date of issuance.

--------------------------------------------------------------------------------
                          19        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 11 - 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. For the year ended December 31, 2003
         and 2002, dividends in the amount of $80,000 were accrued related to
         the Series A Preferred Shares outstanding. At December 31, 2003 and
         2002, the per share amount of dividends in arrearages amounted to $0.25
         and $0.14, 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 Stock holders:

                  (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.

--------------------------------------------------------------------------------
                          20        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 11 - STOCKHOLDERS' EQUITY (CONTINUED)

                  The shares of Series A Preferred Stock shall be redeemable, at
         the option of the holders, for 115% of the original purchase price,
         plus all accrued and unpaid dividends, if the Company fails to file a
         registration statement within 180 days following the Closing Date
         relating to the resale of the shares of common stock issuable upon the
         conversion of the Series A Preferred Stock and upon exercise of the
         Warrants.

                  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. During January 2004, the Company realized
         the $75,000 receivable that was outstanding on this transaction at
         December 31, 2003.

NOTE 12 - 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 1,300,000 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. During 2003, 155,000 options have been granted
         under this Plan, all of which were granted at market value. No options
         were granted during 2002.

                  0 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, 2003, 1,162,500 options have been granted
         under the 1999 plan of which 737,500 have been granted below market
         price and for which 140,000 options have been exercised through
         December 31, 2003. At December 31, 2002, 1,142,500 options were
         granted, of which 737,500 had been granted below market price.
         Compensation expense related to these options was $80,374 and $80,367
         for employees and directors, and $47,000 and $25,918 for legal counsel
         for the years ended December 31, 2003 and 2002, respectively.

--------------------------------------------------------------------------------
                          21        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 12 - STOCK OPTION PLAN (CONTINUED)

                  A summary of the status of the Company's stock option plans as
         of December 31, 2003 and 2002 is presented below:

<TABLE>
<CAPTION>
                                                              2003                               2002
                                                   --------------------------          --------------------------
                                                                     Weighted                            Weighted
                                                                      Average                            Average
                                                                     Exercise                            Exercise
                                                    Shares             Price           Shares             Price
                                                   ---------         --------         ---------          --------
<S>                                                <C>                <C>               <C>               <C>
Outstanding, beginning of year                     1,002,500          $ 1.11            980,000           $ 1.09
  Granted                                            175,000            0.69             32,500             1.42
  Exercised                                                0            0.00            (10,000)           (0.05)
                                                   ---------          ------          ---------           ------

Outstanding, end of year                           1,177,500          $ 1.05          1,002,500           $ 1.11
                                                   =========          ======          =========           ======

Options exercisable at year-end                      886,594          $ 1.08            595,366           $ 1.11
                                                   =========          ======          =========           ======

Weighted average fair value of options
  granted during the year                                             $ 0.47                              $ 0.50
                                                                      ======                              ======
</TABLE>

                  The following table summarizes information about options
         outstanding at December 31, 2003 and 2002:

<TABLE>
<CAPTION>
                                      2003                                                            2003
                               Options Outstanding                                             Options Exercisable
--------------------------------------------------------------------------------      -------------------------------------
                           Number               Remaining            Weighted              Number               Weighted
   Ramge of            Outstanding at        Contractual Life         Average           Outstanding at          Average
Exercise Prices      December 31, 2003           (Years)          Exercise Price      December 31, 2003      Exercise Price
---------------      -----------------       ----------------     --------------      -----------------      --------------
<S>                          <C>                    <C>               <C>                     <C>                  <C>
     $0.05                   185,000                3.96              $0.05                   149,333              $0.05
 $0.57 - $0.90               180,000                4.94               0.61                    73,970               0.62
 $0.91 - $1.50               612,500                3.90               1.17                   513,291               1.17
 $1.51 - $2.00               200,000                4.25               2.00                   150,000               2.00
                     ---------------                                                  ---------------
                           1,177,500                                                          886,594
                     ===============                                                  ===============
</TABLE>

--------------------------------------------------------------------------------
                          22        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants
<PAGE>

CIMNET, INC.
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 12 - STOCK OPTION PLAN (CONTINUED)

<TABLE>
<CAPTION>
                                      2003                                                            2003
                               Options Outstanding                                             Options Exercisable
--------------------------------------------------------------------------------      -------------------------------------
                           Number               Remaining            Weighted               Number              Weighted
   Range of            Outstanding at        Contractual Life         Average           Outstanding at          Average
Exercise Prices      December 31, 2002           (Years)          Exercise Price      December 31, 2002      Exercise Price
---------------      -----------------       ----------------     --------------      -----------------      --------------
<S>                          <C>                    <C>               <C>                     <C>                  <C>
     $0.05                   185,000                4.96              $0.05                   106,700              $0.05
 $0.60 - $0.90                25,000                5.60               0.72                    13,840               0.70
 $0.91 - $1.50               592,500                4.89               1.15                   366,426               1.18
 $1.51 - $2.00               200,000                5.25               2.00                   108,400               2.00
                     ---------------                                                  ---------------
                           1,002,500                                                          595,366
                     ===============                                                  ===============
</TABLE>

NOTE 13 - COMMITMENTS AND CONTINGENCIES

                  The Company leases various office equipment and a vehicle
         which are classified as operating leases. The minimum rental payments
         under these operating leases, which expire during 2004, amount to
         $18,575 for the year ending December 31, 2004.

                  During 2001, the Company obtained a 25% interest in an
         aircraft and assumed 25% of the related outstanding debt (Note 7). The
         Company is jointly and severably liable for the total outstanding debt
         should the other 75% of the aircraft ownership fail to honor their
         obligations. The total amount outstanding on this obligation was
         $711,484 and $888,424 at December 31, 2003 and 2002, respectively.

                  Total rental expense under all leases for the years ended
         December 31, 2003 and 2002 was $143,831 and $156,845, respectively.

                  Cimnet, Inc. is 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 14 - 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 2003, the Company had sales to one customer totaling
         $567,434 of which $65,948 was outstanding at December 31, 2003. During
         2002, the Company had sales to one customer totaling $1,391,831 of
         which $112,565 was outstanding at December 31, 2002. No other
         significant concentrations existed at December 31, 2003 and 2002.

--------------------------------------------------------------------------------
                          23        Beard Miller Company LLP
                                    Certified Public Accountants and Consultants

<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 30, 2004

                                      CIMNET(R), INC.

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

<TABLE>
<CAPTION>
Signature                                 Title                     Date
---------                                 -----                     ----

<S>                       <C>                                       <C>
/s/ John D. Richardson    Chairman of the Board, Chief Executive    March 30, 2004
----------------------    Officer and Chief Accounting Officer
John D. Richardson


/s/ William Nyman         Director and Vice President               March 30, 2004
----------------------    of Integration Services
William Nyman


/s/ David Birk            Director                                  March 30, 2004
----------------------
David Birk


/s/ Karl Gerhart          Director                                  March 30, 2004
----------------------
Karl Gerhart
</TABLE>