UNITED STATES 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
     EXCHANGE ACT OF 1934

                  For the fiscal year ended December 31, 2006


                         Commission File Number: 0-22597


                                CIMNET (R), INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)


  Delaware                                                 52-2075851
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  (State or other jurisdiction of                          (I.R.S. Employer
  incorporation or organization)                           Identification No.)


  925 Berkshire Boulevard, Wyomissing, Pennsylvania        19610
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  (Address of principal executive offices)                 (Zip Code)


  Issuer's telephone number:                               (610) 790-1800
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Securities registered pursuant to Section 12(b) of the Act:      None

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

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

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
 Yes [X] No [ ]

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

         Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

         Revenues for the Issuer's most recent fiscal year are $5,326,014.

         The aggregate market value of the voting stock held by non-affiliates
of the Issuer as of March 27, 2007 was $8,179,281 (based on a closing price of
$2.20 per share).

         The number of outstanding shares of the Issuer's common stock as of
March 27, 2007 was 7,414,044 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 2007.

         Transitional Small Business Disclosure Format. Yes [ ] No [X]

<PAGE>

                                  CIMNET, INC.

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

FORWARD-LOOKING STATEMENTS                                                    1

PART I
------

          Item  1       BUSINESS                                              2
          Item  2       PROPERTIES                                           15
          Item  3       LEGAL PROCEEDINGS                                    15
          Item  4       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  16

PART II
-------

          Item  5       MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                        STOCKHOLDER MATTERS                                  16
          Item  6       MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
                        OPERATIONS                                           18
          Item  7       FINANCIAL STATEMENTS                                 24
          Item  8       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                        ACCOUNTING AND FINANCIAL DISCLOSURE                  24
          Item  8A      CONTROLS AND PROCEDURES                              24
          Item  8B      OTHER INFORMATION                                    24

PART III
--------

          Item  9       DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
                        CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A)
                        OF THE EXCHANGE ACT                                  25
          Item 10       EXECUTIVE COMPENSATION                               25
          Item 11       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                        AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS       25
          Item 12       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS       25
          Item 13       EXHIBITS, LISTS AND REPORTS ON FORM 8-K              26
          Item 14       PRINCIPAL ACCOUNTANT FEES AND SERVICES               26

<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

         Certain statements contained in this Annual Report on Form 10-KSB
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. All statements included in this Annual Report, other
than statements of historical facts, regarding our strategy, future operations,
financial position, estimated revenues, projected costs, prospects, plans and
objectives are forward-looking statements. When used in this Annual Report, the
words "believe," "anticipate," "intend", "estimate," "expect," "project",
"could", "would", "may", "plan", "predict", "pursue", "continue", "feel" 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 date 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.

         Although we believe that the expectations reflected in any of our
forward-looking statements are reasonable, actual results could differ
materially from those projected or assumed in any of our forward-looking
statements. Our future financial condition and results of operations, as well as
any forward-looking statements, are subject to change and to inherent risks and
uncertainties, such as those disclosed in this Annual Report. Important factors
that could cause our actual results, performance and achievements, or industry
results to differ materially from estimates or projections contained in
forward-looking statements include, among others, the following:

         o        our relationship with our existing customers;

         o        our need for additional capital;

         o        our dependence upon the demand for manufacturing software;

         o        our reliance on relatively large orders from a limited number
                  of customers;

         o        operating costs are generally fixed relative to sales;

         o        intense competition from competitors;

         o        our ability to recruit and maintain key management and other
                  personnel,

         o        our ability to protect our intellectual property rights;

         o        intellectual property infringement claims;

         o        product liability claims;

         o        product concentration; and

         o        our ability to generate sufficient cash to operate and expand
                  our business.

         Market data and other statistical information used throughout this
report is based on independent industry publications, government publications,
reports by market research firms or other published independent sources and on
our good faith estimates, which are derived from our review of internal surveys
and independent sources. Although we believe that these sources are reliable, we
have not independently verified the information and cannot guarantee its
accuracy or completeness.

         Forward-looking statements in this Annual Report on Form 10-KSB speak
only as of the date hereof, and forward looking statements in documents attached
are incorporated by reference and speak only as of the date of those documents.
The Company does not undertake any obligation to update or release any revisions
to any forward-looking statement or to report any events or circumstances after
the date hereof or to reflect the occurrence of unanticipated events, except as
required by law. Unless otherwise noted, the terms "we", "our", "us", and
"Company" refer to CIMNET, Inc.

<PAGE>

                                     PART I

Item 1 - BUSINESS
         --------

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

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

         Our products utilize Microsoft and Oracle database technology to
electronically manage production schedules, process control, documents, product
quality, machine efficiency, material yields and labor time and attendance. They
help drive manufacturing standards and enable production to eliminate
variability in complex manufacturing operations. CIMNET's products operate on
Windows(R) 95, 98, 2000, 2003, XP and NT.

         CIMNET, Inc. is proud to report that many of its clients are leading
manufacturers, including GE Energy, Tyson Foods, Alcoa, Johnson & Johnson,
Raytheon, Nestle Foods, Barber Foods, Caterpillar and Coca Cola. During the year
ended December 31, 2006, two of our customers accounted for approximately 47.6%
of our total billings.


         Recent Developments

         CIMNET, Inc. continued to be profitable in 2006, due to increased
market awareness and demand for MES software, our staff's dedication to
producing a world class product and the continued improvement to our releases of
Factelligence IP. CIMNET, Inc. continued its implementations, using
Factelligence IP in multiple metals manufacturing plants during the year under a
global contract with a Fortune 100 metals company. CIMNET, Inc. also was
selected by a Fortune 100 US-based food company as its manufacturing software
provider for its global manufacturing facilities. A successful pilot with this
customer in 2006 led to its company-wide rollout of Factelligence IP. As part of
our global strategy for expansion, CIMNET, Inc. also continued to increase the
number of worldwide partners for the sale and implementation of our software. As
discussed in 2005, CIMNET, Inc. released a version of Factelligence IP for the
Chinese market and was successful in its first deployment of Factelligence IP in
China. We anticipate continued growth during 2007 as CIMNET, Inc. extends its
footprint in the Manufacturing Execution Systems (MES) space.

                                       2
<PAGE>

         Factelligence (R) Industrial Portal(TM)

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

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

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

         DNC Professional 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
locate pertinent information quickly and easily. The components and
communications that exist with DNC Professional have been included in the
Factelligence IP product suite to allow for our customer base to migrate from
one platform to the other.

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


         Industry Analysis

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

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

                                       3
<PAGE>

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

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

         The transition in the nature of manufactured goods from one of long,
homogeneous production runs to shorter, more customized products has created the
need for new and improved manufacturing processes. To achieve this objective,
manufacturers must develop better links between the demand for its products on
the front end and the factory floor resources used to produce those products
(manufacturing plants, supply chains) 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 and beverage,
rolled products, pharmaceutical, medical devices, automotive, aerospace and
consumer packaged goods. These industries are all under competitive pressures to
reduce manufacturing costs through better utilization of resources, reduction in
inventories, elimination of scrap/waste, and improvements in labor productivity
and the entire supply chain. In addition, certain industries, such as
pharmaceutical and food and beverage, are facing heightened regulation,
especially the Food and Drug Administration's regulation 21 CFR Part 11
concerning Electronic Recordkeeping and Electronic Signatures.

                                       4
<PAGE>

                             [GRAPHIC CHART OMITTED]

                                 CPM - Discrete
                                  CAGR - 14.5%

                                   (millions)


           2006        2007         2008         2009         2010         2011
         -----------------------------------------------------------------------
           860.5      985.27      1128.13      1291.71      1479.01      1693.47
         -----------------------------------------------------------------------

         Figure 1 Source: ARC Advisory Group

         According to the ARC Advisory Group, the Company's total addressable
CPM discrete market is expected to increase to approximately $1.7 billion in
2011, a compound annual growth rate of 14.50% over the next several years (See
Figure 1).

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

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

                                       5
<PAGE>
                             [GRAPHIC CHART OMITTED]

                                  CPM - Process
                                   CAGR - 12%

                                   (millions)


              2006      2007         2008         2009         2010         2011
         -----------------------------------------------------------------------
              1600      1792      2007.04      2247.89      2517.64      2819.76
         -----------------------------------------------------------------------


Figure 2 Source: ARC Advisory Group

         According to the ARC Advisory Group, the Company's total addressable
CPM Process market is expected to increase to approximately $2.8 billion in
2011, a compound annual growth rate of 12.0% over the next several years (See
Figure 2).

         The fragmented nature of the market arose as result of the diverse
information technology needs of various manufacturing industries, and there
remains less standardization across products than what is typically found in
many other applications. Historically, many solutions were originally developed
by industry generalists, such as food and beverage, or pharmaceuticals software
programmers that developed various customized products for their clients in
response to specific requests. They then packaged their factory automation
product and sold it to other companies in the same industry. Solutions providers
also tended to develop products for specific applications, such as Human Machine
Interface/Supervisory Control and Data Acquisition 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.

         Figures 1 and 2 illustrate how the Company's core Manufacturing
Execution System (or Collaborative Production Management) solutions address an
existing $2.5 billion market that is expected to grow to $4.5 billion by 2011.
The Company's integrated HMI/SCADA solution addresses a separate $500 million
Human Machine Interface Market that, according to ARC Research is expected to
grow better than 4% per year over the next several years. In early 2005, the
Company released its Manufacturing Intelligence module, a new solution targeted
at the $2.2 billion Enterprise Performance Management market. While these
markets have traditionally been served by their own set of focused solutions
providers, the Company's unified Factelligence IP Suite has the potential to
capture a small percentage of these markets. With the manufacturing sector
recovering and competitive pressures continuing to mount, overall spending on
total factory floor automation software is expected to increase.

                                       6
<PAGE>

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

         Although, the competitive pressures on manufacturers have intensified,
we anticipate that this additional competition will increase demand for software
solutions that can improve a manufacturers' ability to efficiently coordinate
customer orders into the manufacturing supply chain. The Company's Factelligence
IP software solution provides manufacturers in a variety of industries with a
configurable, out-of-the-box software solution that may improve their
competitiveness.


         Sales and Marketing

         In 2007, the Company plans to increase its use of partners worldwide.
The Company believes it can add an additional four sales and integration
partners for its Factelligence IP software during 2007.

         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 five
direct sales employees and approximately ten integration partners worldwide. The
Company also has an employee dedicated to developing corporate partnerships and
strategic alliances.

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


         Subscription Model

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


         Maintenance and Support

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

                                       7
<PAGE>

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

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


         Research and Development

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

         As of March 28, 2007, we had 31 full-time employees, one part-time
employee, and four consultants engaged in research and development activities.
During the years ended December 31, 2006 and 2005, we spent $2,244,268 and
$1,385,791, respectively, on research and development. We expect to continue to
commit significant resources to research and development in the future. To date,
no research and development costs have been capitalized. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."


         Competition

         The market for our products is rapidly evolving and is expected to
become increasingly competitive as current competitors expand their product
offerings and new companies enter the market. The principal competitive factors
in the personal computer 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.

                                       8
<PAGE>

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

         CIMNET's current competitors include a number of companies offering one
or more solutions for the manufacturing software automation market, some of
which are directly competitive with CIMNET's products. For example, CIMNET's
competitors in the DNC market include CIMCO, Greco Systems and Predator. In the
MES market space, CIMNET's key competitors include Camstar, Rockwell Automation,
Invensys, Siemens and GE Fanuc. We also may face competition from systems
integrators and consulting firms that 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.

         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 which are confidential when filed, with regard to
similar technologies.

                                       9
<PAGE>

         We have registered the CIMNET and Factelligence trademarks with the
U.S. Patent and Trademark Office. There can be no assurance that infringement or
invalidity claims arising from the use of our trademarks or the incorporation of
third party technology will not be asserted or prosecuted against CIMNET, Inc.
In addition, claims for indemnification from CIMNET's customers resulting from
these claims may be asserted or prosecuted against CIMNET, Inc. 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 have a material adverse
affect on our business, operating results and financial condition.


         Employees

         As of March 30, 2007, we had 39 full-time employees and one part-time
employee, including 32 in research and development of new software and
implementation; five in sales and marketing; one in developing corporate
partnerships and strategic alliances; and, two in operations and order
processing. In addition we had four consultants working on research and
development of new software.


         Risk Factors

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


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

         We Have Incurred Substantial Losses And We May Not Be Profitable In The
Future. During the fiscal years ended December 31, 2006, 2005 and 2004 we
reported a net income of $1,347,967 and $98,675 and a net loss of ($1,203,578).
Through December 31, 2006, our accumulated deficit equaled $2,916,089. Although
we reported a net profit during the 2006 and 2005 fiscal years, we cannot be
certain that we will remain profitable in the future. Failure to remain
profitable may adversely affect our ability to conduct business and the market
price of our common stock.

         We May Need Additional Capital, and We Cannot Be Sure That Additional
Financing Will Be Available. Historically, we have funded our operating losses
and capital expenditures through proceeds from private equity and debt
financings. During 2004, we issued shares of our common stock and common stock
purchase warrants in a private placement and borrowed funds from John D.
Richardson, III, our Chief Executive Officer and founder, to fund our on-going
operations. Although we currently anticipate that our available funds and cash
flow from operations will be sufficient to meet our cash needs for the immediate
future, we may require additional financing. Our ability to obtain financing
will depend, among other things, on our development efforts, business plans,
operating performance and condition of the capital markets at the time we seek
financing. We cannot assure 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

                                       10
<PAGE>

material adverse effect on the Company's business, financial condition,
prospects and results of operations.

         Our Annual 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 subscription license and service revenue
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, 2006, two customers accounted for
approximately 47.6% of our total revenue and during the year ended December 31,
2005, another customer accounted for approximately 31% of our total revenue. We
anticipate that we will continue to be dependent upon a limited number of key
customers in the future. 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 the significant growth in consulting and implementation
services performed in recent years.

         The Demand For Manufacturing Software Seems To Have Strengthened During
The Past Year, But Could Weaken Significantly In the Future, Depending On The
Future Economic Climate. The market for our manufacturing software strengthened
during 2005 and 2006, but could change rapidly in the coming years depending on
the economic climate. The market for advanced manufacturing automation software
declined dramatically during 2002, 2003 and 2004, and there is no guarantee the
strengthening we have seen in the last two years will continue. Many
manufacturing companies have experienced financial difficulties or uncertainty,
and, as a result, have canceled or delayed spending on technology initiatives.
These companies typically are not demonstrating the same urgency regarding
technology initiatives. If companies cancel or delay their business and
technology initiatives because of the current or future economic climate, or for
other reasons, our business, financial condition and results of operations would
be materially and adversely affected.


         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. 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 year and could have a material adverse effect on operations for that
year.

         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 the year 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 year to year 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.

                                       11
<PAGE>

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

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

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

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

         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 Wyomissing, 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

                                       12
<PAGE>

are integral to our product development, sales and marketing and support teams
may limit the rate at which we can develop new products or product enhancements.
This could have a material adverse effect on our business, operating results and
financial condition.

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

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

         Our Use of the "CIMNET (R)" and "Factelligence (R)" Trademarks May
Infringe the Trademark Rights of Other Companies. Our use of "CIMNET (R)" and
"Factelligence (R)," as well as the use of other names, may result in costly
litigation, divert management's attention and resources, cause product shipment
delays or require CIMNET, Inc. to pay damages and/or to enter into royalty or
license agreements to continue to use a product name. CIMNET, Inc. 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 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

                                       13
<PAGE>

reputation, any of which could have a material adverse effect on our business,
operating results and financial condition. We warrant some of our products for
one year, providing customers a right to refund a portion of the license fee if
we are unable to correct an error in the product. To date, no customer has
requested a refund under the warranty provisions. However, if we are required to
refund significant portions of license fees, our business, operating results and
financial condition could be materially adversely affected.

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


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

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

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

         o        the market for manufacturing automation software operating on
                  personal computers is in its preliminary stage of development
                  and it is therefore difficult to accurately predict customer
                  demand; and
         o        the sales cycle for our products and services varies
                  substantially from customer to customer, and we expect the
                  sales cycle to be long.

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

         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 is below our expectations, we could not proportionately reduce operating
expenses, and therefore this revenue shortfall would have a disproportionate
effect on our expected operating results.

         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.

                                       14
<PAGE>

         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, III, our founder,
Chief Executive Officer and Chairman of the Board, controls approximately 41.3%
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, Inc., could deprive our
stockholders of an opportunity to receive a premium for their common stock as
part of a sale of CIMNET, Inc. 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.


Item 2 - PROPERTIES
         ----------

         Until January 25, 2007, our principal facility was a 7,500 square foot
building in Robesonia, Pennsylvania. The building is owned by John D.
Richardson, III, our Founder, Chief Executive Officer and Chairman of the Board,
and was leased to the Company on a month-to-month basis. During January 2007,
the Company entered into a new lease for a building located in Wyomissing,
Pennsylvania. The new building is owned by a joint venture of three Pennsylvania
limited liability companies formed in 2006. Although the Company believes that
the execution of the Lease and the relocation of its executive offices to the
Premises is in the best interests of the Company, it should be noted that the
joint venture comprises (i) JNL Real Estate, LLC owned by John Richardson, III,
the Company's founder, President and Chief Executive Officer, and his wife; (ii)
Eastwood Associates, LLC owned by Jason Dietrich, the Company Vice
President-Sales and Chief Operating Officer, as well as certain other employees
of the Company; and, (iii) HBL Holdings, LLC owned by William Nyman, a member of
the Company's Board of Directors and Vice President of Integration Services. The
Company believes that the terms and conditions of the Lease are fair and
reasonable and at least as favorable to the Company as comparable premises owned
by third party landlords.

         Pursuant to the lease, the Company will rent approximately 21,000
square feet of office space at a monthly rent of $39,173.33, which rent shall
increase by 2% annually commencing on February 1 of each subsequent year during
the seven (7) year term of the Lease. In the event that the Company has
performed its obligations under the lease, the Company may notify the lessor
that it elects to renew the lease on terms and conditions to be agreed upon by
the parties. We believe our new facility will be adequate to meet our future
business requirements.


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.

                                       15
<PAGE>

Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ---------------------------------------------------

         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, 2006.


                                     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, Inc. 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, 2006, as
reported by the OTC Bulletin Board. The quotes represent inter-dealer prices
without adjustment for 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.
<TABLE>
<CAPTION>

                                                  Common Stock

                                   High           Low                                High           Low
                                   -----         -----                               -----         -----
                2006                                                2005
                ----                                                ----
<S>                              <C>           <C>                              <C>           <C>
       Quarter ended                                        Quarter ended
       March 31, 2006              $1.45         $0.60      March 31, 2005           $0.80         $0.40
       Quarter ended                                        Quarter ended
       June 30, 2006               $1.45         $1.25      June 30, 2005            $0.82         $0.55
       Quarter ended                                        Quarter ended
       September 30, 2006          $1.60         $1.20      September 30, 2005       $0.95         $0.61
       Quarter ended                                        Quarter ended
       December 31, 2006           $2.80         $1.51      December 31, 2005        $0.90         $0.52
</TABLE>


         On March 26, 2007, the final quoted prices as reported by the OTC
Bulletin Board was $2.20 for each share of Common Stock. As of March 27, 2007,
there were 7,414,044 shares of Common Stock outstanding, held of record by
approximately 68 record holders.

                                       16
<PAGE>

         Equity Compensation Plan Information

         The following table summarizes our equity compensation plans as of
December 31, 2006:
<TABLE>
<CAPTION>

                      Equity Compensation Plan Information
                      ------------------------------------

                                                                                                (c)
                                                                                        Number of securities
                                                    (a)                    (b)         remaining available for
                                            Number of securities    Weighted-average    future issuance under
                                             to be issued upon      exercise price of    equity compensation
                                                exercise of            outstanding         plans (excluding
       Plan category                        outstanding options,    options, warrants   securities reflected in
                                            warrants and rights        and rights            column (a))
                                           ---------------------------------------------------------------------
<S>                                                 <C>                   <C>                 <C>
Equity compensation plans
or arrangements approved by
security holders                                    1,457,500             $0.87               882,500

Equity compensation plans
or arrangements not
approved by security holders                               --                --                    --
                                           ---------------------------------------------------------------------

Total                                               1,457,500             $0.87               882,500
                                           =====================================================================
</TABLE>


         Recent Sales of Unregistered Securities

         On October 23, 2006, the Company issued 30,508 shares of its common
stock to the Lipman Capital Group, Inc. in connection with the cashless exercise
of common stock. The shares were issued pursuant to Section 4(2) of the Security
Act of 1933, as amended.



                                       17
<PAGE>

Item 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
         ----------------------------------------------------------

RESULTS OF OPERATIONS

Year Ended December 31, 2006 Compared To Year Ended December 31, 2005

         Net sales for the year ended December 31, 2006, were $5,326,014, an
increase of 52.1%, or $1,824,096, over net sales of $3,501,918 for the year
ended December 31, 2005. This increase is due to the overall market upturn in
MES (Manufacturing Execution System) sales along with the Company's subscription
sales model for Factelligence IP receiving increased market acceptance,
resulting in new orders and increased revenues, including related implementation
and service revenues. During the year ended December 31, 2006, the Company
received significant software maintenance renewals as well as orders from three
large food manufacturers and a manufacturer of custom fire-fighting equipment.
In addition to orders in the United States, the Company also received orders
and/or commitments from customers located in China, Canada, Hungary and the
Netherlands. Some of these projects have commenced and others are expected to
start in early 2007. We added engineering staff throughout 2006 and anticipate
adding several more application engineers to meet existing and anticipated
demands from our customers.

         Cost of goods sold for the year ended December 31, 2006, was $375,265,
or 7.0% of net sales, compared to $340,775, or 9.7% of net sales for the year
ended December 31, 2005, representing a 2.7% decrease in the percentage of cost
of goods sold as related to total net sales over the same period in 2005. The
decrease is due to a 52.1% increase in sales for the year ended December 31,
2006, compared to the same period in 2005. The increase in sales during the year
came primarily from MES software and services, which have a lower cost of goods
sold percentage than our DNC products.

         Gross profit for the year ended December 31, 2006, was $4,950,749
compared to $3,161,143 for the year ended December 31, 2005, an increase of
$1,789,606, or 56.6%, which is consistent with the increase in net sales and
decrease in cost of goods sold as a percentage of sales.

         Selling, general and administrative expenses for the year ended
December 31, 2006, were $2,084,589 (inclusive of the write-off of leasehold
improvements and property and equipment abandonments) or 39.1% of net sales
compared to $1,645,467, or 47.0% of net sales, for the year ended December 31,
2005. The decrease in the percentage of SG&A as related to total net sales over
the same period in 2005 is primarily attributable to the 52.1% increase in sales
and an only 26.7% increase in selling, general and administrative expenses for
the year ended December 31, 2006, over the same period in 2005. The increase in
selling, general and administrative expenses for the year ended December 31,
2006, is attributable to the following: substantial increase in sales
commissions due to a 52.1% increase in sales during the year; increase in
employee compensation to adjust for salary reductions implemented in previous
years; general increase in health insurance costs; an increase in office
expenses; and, loss from the disposals of leasehold improvements, property and
equipment totaling $145,454 due to the relocation of the Company's corporate
office.

                                       18
<PAGE>

         Research and development and engineering services costs for the year
ended December 31, 2006, were $2,244,268, or 42.1% of net sales compared to
$1,385,791, or 39.6% of net sales for 2005, an increase of $858,477. This
represents a 2.5% increase in the percentage of R&D as related to total net
sales over the same period in 2005. This increase is due to the employment of
additional developers and software engineers to support the demands of increased
current and expected future orders; an increase in employee compensation to
adjust for salary reductions implemented in previous years; and, salary
increases for those employees who had previously forgone raises.

         Income from operations for the year ended December 31, 2006, was
$489,342, including SFAS 123(R) recognition of $132,550 expense for stock
options granted during the period, compared to income of $128,803 for the year
ended December 31, 2005, an improvement of 279.9%, or $360,539, in operations
over the previous year. This improvement in operations is predominantly due to
the previously discussed 52.1% increase in sales with an only 47.1% increase in
operating expenses combined with a 2.7% decrease in cost of goods sold as a
percentage of net sales for the year ended December 31, 2006, compared to the
same period in 2005.

         Net interest expense for the year ended December 31, 2006 was $33,921,
or 0.6% of net sales, compared to net interest expense of $58,068, or 1.7% of
net sales, for the year ended December 31, 2005. This $24,147, or 41.6%,
decrease is the result of the Company's repayment of its note payable to John
Richardson, III, CEO. Additionally, the Company maintained an average daily
balance of $314,621 on its line of credit for the year ended December 31, 2006,
as compared to an average daily balance of $578,564 for the year ended December
31, 2005. The corresponding average daily interest rate for the years ended
December 31, 2006 and December 31, 2005 were 9.13% and 7.87%, respectively. This
increase in interest rates partially offsets the benefit of the Company's lower
average balance outstanding in 2006. The Company decreased borrowings on its
outstanding credit line by $359,000 during 2006 to an outstanding balance of
$302,000 on December 31, 2006. At March 28, 2007, the outstanding balance was
$431,000 less a float of $15,225 for unapplied funds for a net balance of
$415,775.

         In 2005, miscellaneous income was earned from assisting an individual
to find a buyer for the shares of the Company stock that they owned. There was
no such transaction during 2006.

         Based on the Company's profitability in 2005 and 2006 and the Company's
expectation of taxable income in future periods, the Company reversed its entire
$892,241 valuation allowance for deferred taxes in 2006, as it expects to use
this amount to offset future taxable income. No benefit for income taxes was
recorded for the year ended December 31, 2005.

         Net income for the year ended December 31, 2006, was $1,347,967 or
$0.18 per basic and $0.15 per diluted share, as compared to net income of
$98,675 or $0.01 per basic and diluted share for the same period in 2005. The
net income of $1,347,967 comprises primarily $489,342 in operating income for
the year ended December 31, 2006, which is net of stock options expensed for the
period of $132,550, $145,454 of leasehold improvement abandonments and disposals
of furniture and equipment incurred when the Company signed a lease for its new
corporate headquarters, and the reversal of $892,241 in deferred tax valuation
allowance. This increase of $1,249,292 in net income for the year ended December
31, 2006, over the same period in 2005, is primarily due to the previously
discussed increase in sales, combined with decreases in cost of goods sold as
percentage of net sales, and the reversal of the remaining deferred tax
valuation allowance.

                                       19
<PAGE>

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

         Net sales for the year ended December 31, 2005 were $3,501,918, an
increase of 46.5%, or $1,110,961, over net sales of $2,390,957 for the year
ended December 31, 2004. This increase is due to the overall market upturn in
MES (Manufacturing Execution System) sales, along with the Company's
subscription sales model for Factelligence IP receiving increased market
acceptance, resulting in new orders and increased revenues.

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

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

         Selling, general and administrative expenses for 2005 were $1,645,467,
or 47 % of net sales, compared to $1,923,231, or 80.4% of net sales, for 2004, a
decrease of $277,764, or 14.4%. The decrease is primarily attributable to the
changes in the following categories that were directly attributable to the
Company's cost cutting measures: travel and entertainment decreased by $63,326
and other general and administrative expenses decreased by $151,992. However,
these decreases in the above-mentioned areas were offset by increases in some
other areas, specifically, independent contractor fees increased by $52,362 in
order to meet the needs of some overseas sales contracts. Stock compensation
expense decreased by $53,641 since there were no remaining expenses for stock
options related to consulting and legal services.

         In 2005, research and development and engineering services costs were
$1,385,791 compared to $1,083,849 in 2004, an increase of $301,942, or 27.9%,
from the previous year. This increase is due to the employment of additional
programmers in 2005 to support the programming demands of increased orders from
various customers. However, the drop in research and development costs as a
percentage of net sales from 45.3% in 2004 to 39.6% in 2005 is attributable to
the increase in net sales of 46.5% in 2005 over 2004.

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

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

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


                                       20
<PAGE>

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

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

         Net income for the year ended December 31, 2005, was $98,675 or $0.01
per basic and diluted share, as compared to a net loss of ($1,203,578) or
($0.19) per basic and diluted share for the same period in 2004. The net income
of $98,675 comprises primarily $128,803 in operating income for the year ended
December 31, 2005, which is net of stock compensation expensed for the period of
$1,082. This increase of $1,302,253 in net income for the year ended December
31, 2005, over the same period in 2004, is primarily due to the previously
discussed increase in sales, combined with a lower percentage in cost of goods
sold and a decrease in operating expenses.


Liquidity and Capital Resources

         For the period ended December 31, 2006, the Company used cash generated
from improved profitability and operating cash flow activities to pay down its
bank line of credit, its loan from a shareholder and a bank loan, while
supporting increased general operating expenses. At December 31, 2006, the
Company had current assets of $1,495,410 as compared to $1,075,950 at December
31, 2005, an increase of $419,460, or 39%. This increase in current assets is
primarily the result of an increase of $263,775 in receivables, associated with
increased sales activity.

         Current liabilities were $1,853,502 at December 31, 2006 versus
$2,226,863 at December 31, 2005, a decrease of $373,361, or 20.1%. This decrease
is primarily due to the decrease of the utilization of the line of credit,
repayment of its loan from a shareholder, and an increase in deferred income due
to an increase in maintenance and subscription renewals.


Operating Activities

         Cash provided by operating activities for the year ended December 31,
2006, was $568,737 compared to $331,088 of cash used in operating activities
during the same period in 2005. The increase in net cash provided by operations
in the year ended December 31, 2006, was due to an increase in income primarily
offset by cash required to fund the growth in accounts receivable and an
increase in deferred income taxes.

                                       21
<PAGE>

Investing Activities

         Cash used in investing activities for the year ended December 31, 2006,
was $40,605 compared to $79,895 for the year ended December 31, 2005. The
decrease in cash utilized in 2006 versus the same period in 2005 was due to the
payment of $60,000 for software license rights in 2005, compared to only $9,000
expended in 2006, offset by increased expenditures for computer hardware,
software and office equipment in 2006.


Financing Activities

         During 2006, $495,451 was used in financing activities as opposed to
$299,315 in cash provided by financing activities during 2005. This increase in
cash used in financing activities is due to $110,000 in repayment of a
shareholder demand loan during fiscal year ended December 31, 2006, compared to
only $20,000 in repayment during the same period in 2005, and $359,000 in
payments made to the line of credit in the year ended December 31, 2006,
compared to $319,932 of borrowings from the line of credit during the same
period in 2005.


Capital Resources

         The Company repaid $443,665 of its obligations to Penn Sterling Bank on
June 2, 2006, and an additional $9,365 on June 15, 2006, to settle its entire
obligation. On June 2, 2006, the Company entered into a Loan Agreement with
Wachovia Bank, N.A., modified on February 12, 2007, pursuant to which the
Company may borrow up to $1,000,000 at an interest rate equal to the bank's
prime rate. Interest only is due monthly and the outstanding principal amount
plus accrued interest is due on April 30, 2008. The Company provided the Lender
with a security interest in its assets as well as the personal guaranties of
John D. Richardson, III, the Company's Chief Executive Officer, and his wife.
The balance of outstanding borrowings on lines of credit was $302,000 and
$661,000 at December 31, 2006 and 2005, respectively. As of December 31, 2006,
the Company had $698,000 available on its line of credit.

         In December 2004, the Company borrowed $130,000 from John Richardson,
III, CEO, and issued to him a demand note. The secured note was payable upon
demand from the officer/director and yielded interest at the prime rate plus 1%.
Monthly interest payments were made based on the prime rate for the period.
Payments of $20,000 on April 4, 2005, $23,000 on April 11, 2006, $50,000 on May
12, 2006, and $37,000 on May 31, 2006, were made. As of December 31, 2006, the
Company had repaid the loan in full.

         The Company believes that its cash from operations, existing balances
and available credit lines will be sufficient to satisfy the needs of its
operations and its capital commitments.


Application of Critical Accounting Policies

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

                                       22
<PAGE>

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

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

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

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

         Sale of Maintenance Agreements: Maintenance agreements generally
require the Company to provide technical support and certain software updates to
customers. Revenue on technical support and software update rights is recognized
ratably over the term of the maintenance agreement.

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

         Goodwill - Effective January 1, 2002, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible
Assets." Under SFAS No. 142, goodwill and other intangible assets with
indefinite lives are no longer amortized but are reviewed annually or more
frequently if impairment indicators arise. Based upon such review, management
determined that no write-down of goodwill was required as of December 31, 2006
and 2005.

         Software Development Costs - Under the criteria set forth in SFAS No.
86, "Accounting for Costs of Computer Software to be Sold, Leased or Otherwise
Marketed," capitalization of software development costs begins upon the
establishment of technological feasibility of the product. The establishment of
technological feasibility and the ongoing assessment of the recoverability of
these costs require considerable judgment by management with respect to certain
external factors, including but not limited to, anticipated future gross product
revenue, estimated economic product lives, and changes in software and hardware
technology. Amounts that would have been capitalized under this statement after
consideration of the above factors were immaterial and, therefore, no software
development costs have been capitalized by the Company during 2006.

         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, which have been determined to be immaterial, are included
in cost of goods sold.

                                       23
<PAGE>

         Stock Options and Warrants - The Company adopted SFAS No. 123(R) -
"Share-Based Payments" - on January 1, 2006. The Company accounts for equity
instruments granted to employees and others by measuring compensation cost at
the grant date of such awards based upon their fair value. The fair value of
these awards is then expensed in the Company's operations over the vesting
period of the award. Prior to January 1, 2006, the Company applied the intrinsic
value method in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and related interpretations in
accounting for stock-based compensation costs.


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

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


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

         None.


Item 8A - CONTROLS AND PROCEDURES
          -----------------------

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

         As required by SEC Rule 13a-15(b), we carried out an evaluation as of
December 31, 2006, under the supervision and with the participation of our
management, including our Chief Executive Officer and Principal Accounting
Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the year covered by this report. Based
on the foregoing, our Chief Executive Officer and Principal Accounting Officer
concluded that our disclosure controls and procedures were effective at the
reasonable assurance level.

         There has been no change in our internal controls over financial
reporting during our fiscal year ended December 31, 2006, that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.


Item 8B - OTHER INFORMATION
          -----------------

         None.

                                       24
<PAGE>

                                    PART III
                                   --------


ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 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.


                                       25
<PAGE>

ITEM 13 - EXHIBITS
          --------

     (a) Exhibits.

         Exhibits

            3.01*   Certificate of Incorporation of CIMNET, Inc.

            3.02*   By-laws, as amended, of CIMNET, Inc.

            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'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, III.

           10.07*   2002 Stock Option Plan, as amended.

           10.08*   Form of Notice of Grant of Stock Options and Stock Option
                    Agreement

           31.0     Certification of Chief Executive Officer and Principal
                    Accounting Officer Pursuant to Section 302 of Sarbanes-Oxley
                    of 2002.

           32.0     Certification of Chief Executive Officer and Principal
                    Accounting Officer pursuant to Section 906 of the
                    Sarbanes-Oxley Act of 2002.

           *        Previously filed with the Securities and Exchange
                    Commission.

     (b) Reports on Form 8-K

         None.


ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES
          --------------------------------------

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

                                       26
<PAGE>


                                  CIMNET, INC.

                                FINANCIAL REPORT



                                December 31, 2006












                                       27
<PAGE>

TABLE OF CONTENTS
December 31, 2006


                                                                            PAGE

FINANCIAL STATEMENTS:

Report of Independent Registered Public Accounting Firm                      29
Balance Sheets                                                               30
Statements of Operations                                                     32
Statements of Changes in Stockholders' Equity                                33
Statements of Cash Flows                                                     34
Notes to Financial Statements                                                35






                                       28
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Stockholders
CIMNET, Inc.


         We have audited the accompanying balance sheets of CIMNET, Inc. as of
December 31, 2006 and 2005, and the related statements of operations, changes in
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

         We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of CIMNET, Inc. as of
December 31, 2006 and 2005, 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.

         As discussed in Note 13 to the Financial Statements, the Company
changed its method of accounting for share-based payments in 2006.


                                           /s/ Beard Miller Company LLP


Beard Miller Company LLP
Lancaster, Pennsylvania
March 28, 2007


                                       29
<PAGE>
<TABLE>
<CAPTION>

                                  CIMNET, INC.

                                 BALANCE SHEETS



                                                                 December 31,      December 31,
                                                                     2006             2005
                                                                --------------    --------------
<S>                                                             <C>               <C>
                                     ASSETS

CURRENT ASSETS
    Cash and cash equivalents                                   $       76,666    $       43,985

    Accounts receivable, net of allowance of $28,889 at
        December 31, 2006 and $22,295 at December 31, 2005           1,126,673           869,492

    Inventories                                                         99,030            97,209

    Prepaid expenses                                                   160,586            65,264

    Current deferred income tax assets                                  32,455                --
                                                                --------------    --------------

      Total Current Assets                                           1,495,410         1,075,950

PROPERTY AND EQUIPMENT, NET                                             78,982           258,759

GOODWILL                                                             2,364,145         2,364,145

NON-CURRENT DEFERRED INCOME TAX ASSETS                               1,000,205           140,419

OTHER ASSETS                                                            82,033            95,333
                                                                --------------    --------------

      TOTAL ASSETS                                              $    5,020,775    $    3,934,606
                                                                ==============    ==============
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       30
<PAGE>
<TABLE>
<CAPTION>

                                  CIMNET, INC.

                                 BALANCE SHEETS

                                   (CONTINUED)

                                                                 December 31,      December 31,
                                                                     2006              2005
                                                                --------------    --------------
<S>                                                             <C>               <C>
                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

    Line of credit                                              $      302,000    $      661,000
    Demand note payable, stockholder                                        --           110,000
    Current portion of capital lease obligations                        16,842            15,714
    Current portion of long-term debt                                       --             6,592
    Accounts payable                                                    81,160            97,864
    Accrued expenses                                                    96,108            84,317
    Dividends payable on preferred stock                               312,667           312,667
    Deferred income                                                  1,044,725           938,709
                                                                --------------    --------------

        Total Current Liabilities                                    1,853,502         2,226,863

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

CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION                        3,148            20,285
                                                                --------------    --------------

       TOTAL LIABILITIES                                             1,856,650         2,252,498
                                                                --------------    --------------

STOCKHOLDERS' EQUITY

    Preferred stock, $.0001 8% cumulative convertible;
        5,000,000 shares authorized; 746,965 shares issued
        and outstanding at December 31, 2006 and 2005                       75                75

    Common stock, 15,000,000 shares authorized at $.0001
        par value; 7,414,044 shares issued and outstanding
        at December 31, 2006, and 7,293,859 shares issued
        and outstanding at  December 31, 2005                              741               729
    Paid-in capital                                                  6,079,398         5,945,813
    Accumulated deficit                                             (2,916,089)       (4,264,056)
    Deferred stock compensation                                             --              (453)
                                                                --------------    --------------

    Total Stockholders' Equity                                       3,164,125         1,682,108
                                                                --------------    --------------
    Total Liabilities and Stockholders' Equity                  $    5,020,775    $    3,934,606
                                                                ==============    ==============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       31
<PAGE>
<TABLE>
<CAPTION>

                                  CIMNET, INC.
                            STATEMENTS OF OPERATIONS

                                                                             Years Ended
                                                                             December 31,
                                                                     ----------------------------
                                                                         2006             2005
                                                                     ------------    ------------
<S>                                                                  <C>             <C>
NET SALES                                                            $  5,326,014    $  3,501,918

COST OF GOODS SOLD                                                        375,265         340,775
                                                                     ------------    ------------

       Gross Profit                                                     4,950,749       3,161,143
                                                                     ------------    ------------
OPERATING EXPENSES
    Selling, general and administrative                                 2,084,589       1,645,467
    Stock compensation - employees, consulting and legal services         132,550           1,082
    Research and development and engineering services                   2,244,268       1,385,791
                                                                     ------------    ------------
       Total Operating Expenses                                         4,461,407       3,032,340
                                                                     ------------    ------------

       Operating Income                                                   489,342         128,803

NON-OPERATING INCOME (EXPENSES)
    Interest expense, net of interest income                              (33,921)        (58,068)
    Miscellaneous income                                                      305          27,940
                                                                     ------------    ------------
       Total Non-Operating Expenses                                       (33,616)        (30,128)
                                                                     ------------    ------------

       Income before Income Tax Benefit                                   455,726          98,675

INCOME TAX BENEFIT                                                        892,241              --
                                                                     ------------    ------------

       Net Income                                                    $  1,347,967    $     98,675
                                                                     ============    ============
NET INCOME PER COMMON SHARE
    BASIC                                                            $       0.18    $       0.01
    DILUTED                                                          $       0.15    $       0.01
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       32
<PAGE>
<TABLE>
<CAPTION>

                                  CIMNET, INC.
                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                     Years Ended December 31, 2006 and 2005


                                      Preferred Stock              Common Stock
                                                                                         Paid-In      Accumulated
                                 Shares        Amount         Shares        Amount       Capital        Deficit
                               -----------   -----------   -----------   -----------   -----------    -----------
<S>                           <C>          <C>             <C>         <C>           <C>            <C>
Balance - December 31, 2004        746,965   $        75     7,293,859   $       729   $ 5,945,813    $(4,316,064)
                               -----------   -----------   -----------   -----------   -----------    -----------

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

Balance - December 31, 2005        746,965            75     7,293,859           729     5,945,813     (4,264,056)
                               -----------   -----------   -----------   -----------   -----------    -----------

Net income                              --            --            --            --            --      1,347,967
Implementation of SFAS No 123(R)        --            --            --            --          (453)
Stock compensation expense              --            --            --            --       132,550             --
Exercise of stock warrants
  and options                           --            --       120,185            12         1,488             --
                               -----------   -----------   -----------   -----------   -----------    -----------

Balance - December 31, 2006        746,965   $        75     7,414,044   $       741   $ 6,079,398    $(2,916,089)
                               ===========   ===========   ===========   ===========   ===========    ===========
<CAPTION>

                                                                                       Deferred          Total
                                                                                         Stock       Stockholders'
                                                                                      Compensation       Equity
                                                                                      ------------    -----------
<S>                                                                                <C>            <C>
Balance - December 31, 2004                                                            $    (1,535)   $ 1,629,018
                                                                                       -----------    -----------

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

Balance - December 31, 2005                                                                   (453)     1,682,108
                                                                                       -----------    -----------

Net income                                                                                      --      1,347,967
Implementation of SFAS No. 123(R)                                                              453             --
Stock compensation expense                                                                      --        132,550
Exercise of stock warrants
  and options                                                                                   --          1,500
                                                                                       -----------    -----------

Balance - December 31, 2006                                                                     --    $ 3,164,125
                                                                                       ===========    ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       33
<PAGE>
<TABLE>
<CAPTION>

                                  CIMNET, INC.
                            STATEMENTS OF CASH FLOWS
                                                                                           Years Ended
                                                                                           December 31,
                                                                                    ----------------------------
                                                                                        2006            2005
                                                                                    ------------    ------------
<S>                                                                                 <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES

    Net income                                                                      $  1,347,967    $     98,675
    Adjustments to reconcile net income to net cash
       provided by (used in) operating activities:
          Depreciation and amortization                                                   88,228         103,108
          Loss on abandonment of leasehold improvements and scrapped equipment           145,454              --
          Provision for doubtful accounts                                                  6,594           5,825
          Deferred income taxes                                                         (892,241)             --
          Compensation cost for stock plans                                              132,550           1,082
          (Increase) decrease in assets:
             Accounts receivable                                                        (263,775)       (562,393)
             Inventories                                                                  (1,821)          1,221
             Prepaid expenses                                                            (95,322)            973
          Increase (decrease) in liabilities:
             Accounts payable                                                            (16,704)        (35,906)
             Accrued expenses                                                             11,791          19,984
             Deferred income                                                             106,016          36,343
                                                                                    ------------    ------------

           Net Cash Provided by (Used in) Operating Activities                           568,737        (331,088)
                                                                                    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES

    Purchase of property and equipment                                                   (31,605)        (19,895)
    Purchase of software license rights                                                   (9,000)        (60,000)
                                                                                    ------------    ------------

           Net Cash Used in Investing Activities                                         (40,605)        (79,895)
                                                                                    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES

    Proceeds from exercise of options                                                      1,500              --
    Payments on demand note payable, stockholder                                        (110,000)        (20,000)
    Net borrowings (payments) on line of credit                                         (359,000)        319,932
    Proceeds from long-term borrowings                                                        --          13,500
    Payments on capital lease obligations                                                (16,009)        (12,559)
    Principal payments on long-term borrowings                                           (11,942)         (1,558)
                                                                                    ------------    ------------

           Net Cash Provided by (Used in) Financing Activities                          (495,451)        299,315
                                                                                    ------------    ------------

           Net Increase (Decrease) in Cash and Cash Equivalents                           32,681        (111,668)

CASH AND CASH EQUIVALENTS - BEGINNING                                                     43,985         155,653
                                                                                    ------------    ------------

CASH AND CASH EQUIVALENTS - ENDING                                                  $     76,666    $     43,985
                                                                                    ============    ============

SUPPLEMENTARY CASH FLOWS INFORMATION
    Interest paid                                                                   $     33,921    $     58,737
                                                                                    ============    ============
    Income taxes paid                                                                         --              --
                                                                                    ============    ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       34
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

NOTE 1 - NATURE OF BUSINESS

         CIMNET, Inc. (the Company) is in the business of the development, sale
     and maintenance of computer integrated manufacturing software. The Company
     also is engaged in the resale of hardware that is incidental to the
     operation of its software products. The Company's software is a
     manufacturing execution system, which enables factories to monitor work
     flows and manufacturing processes. The Company also sells subscriptions of
     its Factelligence IP software product. The Company's office is located in
     Wyomissing, Pennsylvania, and the Company has sales throughout the United
     States and abroad. Approximately 80% and 76% of the sales for the years
     ended December 31, 2006 and 2005, respectively, were throughout the United
     States. Credit is granted on terms that the Company establishes for
     individual customers.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Revenue Recognition

         The Company generates revenue principally from the following sources:

                  Software Subscription

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

                  Software and Hardware

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

                  Services

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

                                       35
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005


         Accounts Receivable

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

         Inventories

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

         Property and Equipment

         Property and equipment are stated at cost. Depreciation on equipment is
     computed by the declining-balance method over the equipment's estimated
     useful lives. Improvements to leased property are amortized over the lives
     of the improvements. 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

         On January 23, 2004, the Company entered into a Technology License
     Agreement with ADROIT, a South African Company. That agreement was amended
     and restated on March 17, 2004. As a result, the Company obtained an
     irrevocable license to market ADROIT's VIZNET software, including the right
     to sublicense this product to third parties. The Company was required to
     pay ADROIT $110,000 in accordance with the terms of the agreement. This
     agreement will remain in effect for five years and holds terms for annual
     renewals. As of December 31, 2006, the Company has paid $110,000 of this
     obligation and this amount is being amortized over the life of the
     agreement. In addition to this agreement, the Company issued a purchase
     order in 2006 for $9,000 of additional software. Amortization expense
     included in the results of operations with respect to both of these
     transactions was $22,300 and $14,667 for the years ended December 31, 2006
     and 2005, respectively. The Company's future amortization expense will be
     $23,800, $23,800, $23,800, $9,133 and $1,500 for years ended December 31,
     2007, 2008, 2009, 2010 and 2011, respectively.

                                       36
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

         Goodwill

         Effective as of January 1, 2002, the Company adopted Statement of
     Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other
     Intangible Assets." Under SFAS No. 142, goodwill and other intangible
     assets with indefinite lives are no longer amortized but are reviewed for
     impairment 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, 2006 and 2005.

         Deferred Income

         Deferred income represents prepayments on maintenance contracts and
     software subscriptions 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 per Common Share

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

         Stock Based Compensation

         The Company accounts for its stock-based compensation in accordance
     with SFAS No. 123(R), "Share-Based Payment". See Note 13 for further
     information.

         Prior to January 1, 2006, the Company applied the intrinsic value
     method in accordance with Accounting Principles Board Opinion No. 25,
     "Accounting for Stock Issued to Employees" and related interpretations in
     accounting for stock-based compensation costs. 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:

                                       37
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005
                                                                    Year
                                                                    Ended
                                                                 December 31,
                                                                    2005
                                                                -------------
        Net income available to common stockholders :
            As reported                                         $      98,675
            Preferred stock dividends                                 (46,667)
            Net income applicable to common stockholders               52,008
            Add stock-based employee compensation
                expense included in reported net income                 1,082
            Deduct total stock-based employee
                compensation expense determined under
                fair value based method for all awards                (33,590)
                                                                -------------

            Pro Forma Net Income                                $      19,500
                                                                =============

        Net income per share of common stock, basic:
            As reported                                         $        0.01
                                                                =============

            Pro Forma                                           $        0.00
                                                                =============

        Net income per share of common stock, diluted:
            As reported                                         $        0.01
                                                                =============

            Pro Forma                                           $        0.00
                                                                =============

         The fair value of each option grant is estimated on the date of grant
     using the Black-Scholes options-pricing model. 525,000 options were granted
     in 2006 with an exercise price equal to fair market value. No options were
     granted in 2005.

         Use of Estimates

         The preparation of financial statements in conformity with accounting
     principles generally accepted in the United States of America requires
     management to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent assets and
     liabilities at the date of the financial statements and the reported
     amounts of revenues and expenses during the reporting period. Actual
     results could differ from those estimates.

         Cash and Cash Equivalents

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

                                       38
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                                  December 31, 2006 and 2005

         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 which have been
     determined to be immaterial, 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, 2006 and
     2005 was $60,067 and $64,472, respectively.

         Reclassification

         Certain prior year amounts have been reclassified to conform to the
     current year presentation.


NOTE 3 - PROPERTY AND EQUIPMENT

         Property and equipment consisted of the following at December 31, 2006
     and 2005:
<TABLE>
<CAPTION>

                                                                                        Estimated
                                                          2006             2005       Useful Lives
                                                      --------------------------------------------
<S>                                                   <C>             <C>             <C>
         Furniture, fixtures and equipment            $    225,370    $    772,945    3 - 10 years
         Leasehold improvements                                 --         314,150    7 - 15 years
         Computer software                                  55,026          55,026      3 years
                                                      ----------------------------

         Total fixed assets                                280,396       1,142,121

         Accumulated depreciation and amortization        (201,414)       (883,362)
                                                      ----------------------------

         Net book value                               $     78,982    $    258,759
                                                      ============================
</TABLE>

         Depreciation and amortization related to property and equipment
     amounted to $65,928 and $88,441 for the years ended December 31, 2006 and
     2005, respectively.

                                       39
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

         Due to the relocation of the Company in January 2007, management
     reviewed the schedule of property and equipment and felt it prudent to
     dispose of the remaining value of the leasehold improvements to the
     building previously occupied, as well as any assets that would not be
     retained in the new facility, in the last quarter of 2006. In total, the
     Company disposed of $579,181 of furniture and equipment, the net effect of
     which was immaterial, as these assets were almost fully depreciated. An
     additional $314,150 of leasehold improvements were abandoned, the net
     effect of which amounted to $129,983, as these assets had not yet achieved
     full depreciation. The expense related to these transactions is reflected
     in the selling, general, and administrative line of the Statement of
     Operations of the financial statements.

NOTE 4 - INCOME TAXES

         The benefit for income taxes for the years ended December 31, 2006 and
     2005 was as follows:
<TABLE>
<CAPTION>

                                                                    2006             2005
                                                                ------------     ------------
<S>                                                             <C>              <C>
         Federal:
             Current                                            $   (201,052)    $    (36,186)
             Utilization of net operating loss                       201,052           36,186
               carry-forwards
             Deferred                                                768,846               --
                                                                ------------     ------------

                                    Subtotal - Federal               768,846     $         --
                                                                ------------     ------------
         State:
             Current                                            $    (38,969)    $     (6,106)
             Utilization of net operating loss                        38,969            6,106
               carry-forwards
             Deferred                                                123,395               --
                                                                ------------     ------------

                                      Subtotal - State               123,395     $         --
                                                                ------------     ------------

         Total                                                  $    892,241     $         --
                                                                ============     ============
</TABLE>

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

                                                                    2006             2005
                                                                ------------     ------------
<S>                                                             <C>              <C>
         Pretax at statutory rate                               $    154,947     $     33,550
         State taxes, net of federal benefit                          30,032            7,979
         Valuation allowance                                      (1,168,383)        (106,428)
         Other                                                        91,163           64,899
                                                                ------------     ------------

                                                                $   (892,241)    $         --
                                                                ============     ============
</TABLE>

                                       40
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005


         The net deferred tax asset at December 31, 2006 and 2005 consists of
     the following:

                                                         2006          2005
                                                     ------------  ------------
         Deferred tax assets:
             Deferred stock compensation             $    216,874  $    178,938
             Allowance for doubtful accounts               11,726         9,050
             Accrued vacation                              20,729        18,835
             Research and development credits             148,715       148,715
             Net operating loss carryforwards             636,459       961,910
                                                     ------------  ------------

                                                        1,034,503     1,320,737

             Valuation allowance                               --    (1,168,383)
                                                     ------------  ------------

             Total Deferred Tax Asset                   1,034,503       149,065

         Deferred tax liabilities, depreciation
             expense                                       (1,843)       (8,646)
                                                     ------------  ------------

             Net Deferred Tax Asset                  $  1,032,660  $    140,419
                                                     ============  ============

         Based on the continued improvements in the Company's operations, and
     the Company's forecasted revenue and taxable income, the Company reversed
     all of its valuation allowance for deferred taxes as it expects to use this
     amount to offset future taxable income. During 2006 the valuation allowance
     decreased by $1,168,383. The Company generated taxable income during 2006
     and accordingly used a portion of its net operating loss carryforward to
     offset the resulting income tax liability and reversed all of the valuation
     allowance. The remaining change in the valuation allowance was caused by
     changes in the gross amount of deferred tax assets and liabilities. At
     December 31, 2006, the Company has a gross federal net operating loss
     carryforward of approximately $1,627,000. This net operating loss
     carryforward expires at varying times through 2025. At December 31, 2006,
     the Company has gross state net operating loss carryforwards of
     approximately $1,263,000. The state net operating loss carryforwards expire
     in 2022 through 2025.

    NOTE 5 - LINE OF CREDIT

         On June 2, 2006, the Company established a $1,000,000 line of credit
     with Wachovia Bank, N.A. Interest was payable monthly at the bank's prime
     interest rate plus .75%. Upon renewal of the line on February 12, 2007, the
     interest rate was reduced to the bank's prime interest rate. The balance of
     outstanding borrowings was $302,000 at December 31, 2006. The line of
     credit has been renewed through April 30, 2008 and is subject to annual
     renewal thereafter. The line is secured by all of the Company's assets, as
     well as the personal guaranties of John D. Richardson, III, the Company's
     Chief Executive Officer, and his wife.

         The Company repaid $443,665 of its obligations to Penn Sterling Bank on
     June 2, 2006, and an additional $9,365 on June 15, 2006, to settle its
     entire obligation. The line of credit was collateralized by a first lien
     security interest in all business assets and an unlimited personal
     guarantee of John D. Richardson, III, the Company's Chief Executive
     Officer. This line included a financial covenant that required the Company
     to maintain a certain tangible net worth. The Company was not in compliance
     with this covenant at December 31, 2005. However, a waiver was obtained
     from the bank on March 30, 2006. The balance of outstanding borrowings on
     this line was $661,000 at December 31, 2005.

                                       41
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005


NOTE 6 - DEMAND NOTE PAYABLE, STOCKHOLDER

         The Company had a demand note payable with John D. Richardson, III, the
     Company's Chief Executive Officer. Interest was payable monthly at a rate
     of prime plus 1.00%. The balance of outstanding borrowings was $0 and
     $110,000 at December 31, 2006 and 2005 respectively. The demand note was
     collateralized by a security interest in substantially all business assets
     and a first priority preferred security interest in the Company's software
     programs. This note was subordinated to the bank's line of credit (Note 5).

NOTE 7 - LONG-TERM DEBT

         Long-term debt consisted of the following at December 31, 2005:
<TABLE>
<CAPTION>

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

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

         Long-term portion                                                     $      5,350
                                                                               ============
</TABLE>

         There was no long-term outstanding debt at December 31, 2006.

NOTE 8 - CAPITAL LEASE OBLIGATIONS

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

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

         The following amounts represent annual lease payments by year and in
     the aggregate including amounts which represent interest and current
     maturities at December 31, 2006:
<TABLE>
<CAPTION>
<S>                                                                                  <C>
         Years ending:
                                                                2007           $     17,892
                                                                2008                  3,248
                                                                               ------------
                                                                                     21,140
         Amounts representing interest                                               (1,150)
                                                                               ------------
                                                                                     19,990
         Current maturities                                                          16,842
                                                                               ------------
                                                                                      3,148
                                                                               ============
</TABLE>

                                       42
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005


         The following amounts are included in property and equipment related to
     the above leases at December 31, 2006 and 2005:
<TABLE>
<CAPTION>

                                                                        2006              2005
                                                                -----------------    -----------------
<S>                                                             <C>                  <C>
         Equipment                                              $          47,937    $          47,937
         Accumulated depreciation                                         (21,307)              (7,942)
                                                                -----------------    -----------------
                                                                $          26,630    $          39,995
                                                                =================    =================
</TABLE>

NOTE 9 - EARNINGS PER SHARE

         The Company's calculation of earnings per share is as follows:
<TABLE>
<CAPTION>

                                                                    Year Ended          Year Ended
                                                                December 31, 2006    December 31, 2005
                                                                -----------------    -----------------
<S>                                                             <C>                  <C>
         Net income                                             $       1,347,967    $          98,675
         Preferred stock dividends                                             --              (46,667)
         NET INCOME APPLICABLE TO COMMON
             STOCKHOLDERS                                       $       1,347,967    $          52,008
                                                                -----------------    -----------------

         AVERAGE BASIC SHARES OUTSTANDING                               7,329,731            7,293,859
         Assumed conversion of preferred stock                            746,965              746,965
         Effect of dilutive options and warrants                          930,822              142,417
                                                                -----------------    -----------------
         AVERAGE DILUTED  SHARES OUTSTANDING                            9,007,518            8,183,241
                                                                =================    =================
         NET INCOME PER COMMON SHARE
             Basic                                              $            0.18    $            0.01
                                                                =================    =================

             Diluted                                            $            0.15    $            0.01
                                                                =================    =================
</TABLE>

         A total of 1,355,000 common stock options and 820,000 warrants and
     746,965 shares of convertible preferred stock were included in the
     computation of diluted earnings per share for the year ended December 31,
     2006. A total of 200,000 options were excluded from the calculation as they
     would be anti-dilutive.

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

NOTE 10 - TOTAL RENT EXPENSE AND 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, 2006 and 2005, the Company conducted
     transactions with the related party which were immaterial, both
     individually and in the aggregate.

         Total rental expense under all leases for the years ended December 31,
     2006 and 2005 was $132,921 and $121,851, respectively.

                                       43
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

         Until February, 2007, the corporate offices were located in Robesonia,
     Pennsylvania. The Company rented this space from John D. Richardson, III,
     Chief Executive Officer and Chairman of the Board, on a month-to-month
     basis. Leasehold improvements are required to be amortized over the shorter
     of the length of the lease or the estimated useful life of the asset.
     Because this related party lease was always subject to change, the Company
     amortized leasehold improvements over their estimated useful lives. Rent
     expense for 2006 and 2005 relating to this arrangement was $120,000 each
     year.

         During January, 2007, the Company entered into a new lease for a
     building located in Wyomissing, Pennsylvania. The building is owned by a
     joint venture of three Pennsylvania limited liability companies formed in
     2006 by certain officers and other employees of the Company. Pursuant to
     the lease, the Company will rent approximately 21,000 square feet of office
     space at a monthly rent of $39,173.33, which rent shall increase by 2%
     annually commencing on February 1 of each subsequent year during the seven
     (7) year term of the lease. This lease may be renewed under certain
     conditions. As a result of the new lease agreement, the Company's future
     minimum rent payments are $440,907, $478,698, $488,272, $498,038 and
     $507,998 for years ended December 31, 2007, 2008, 2009, 2010 and 2011,
     respectively.

NOTE 11 - EMPLOYEE DEFERRED SAVINGS 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, 2006 and 2005
     were $31,228 and $22,271, respectively.

NOTE 12 - STOCKHOLDERS' EQUITY

         In January 2001, the Company entered into a two-year agreement with a
     marketing firm in which a total of 400,000 stock warrants were issued. The
     agreement called for 16,667 warrants to vest per month at an exercise price
     of $0.25 per share. 200,000 warrants were vested at December 31, 2001 and
     each of these warrants is exercisable for one share of common stock at an
     exercise price of $0.25 per share. During 2002, the Company amended this
     marketing agreement whereby the remaining 200,000 warrants vested on
     January 1, 2003 and each of these warrants is exercisable for one share of
     common stock at an exercise price of $2.00 per share. The weighted-average
     fair value of warrants vesting in 2003 was $0.26 per warrant. The grant
     date fair value of the warrants issued during 2001 was $0.50 per warrant.
     No warrants were granted during 2006 or 2005. 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 were exercised on October 18, 2006.
     As a result, 30,508 shares of common stock were issued and 169,492 warrants
     were forfeited.

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

                                       44
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

         Each of the preferred shares is convertible into one share of the
     Company's common stock subject to certain anti-dilution adjustments. The
     holders of the Series A Preferred Shares are entitled to receive an annual
     cumulative dividend on each share of the Series A Preferred Shares equal to
     8% of the Issuance Price ($1.33875) payable quarterly on the fifteenth day
     following the end of each fiscal quarter, in kind, in the form of
     additional shares of the Series A Preferred Stock, or at the election of
     the Company in cash; provided, however, that dividends on the Series A
     Preferred Shares will cease to accrue and will not be payable for any year
     during which the Fair Market Value (as defined) of the Common Stock, as of
     the anniversary date of August 17, increases by an amount equal to or
     greater than 8% over the Fair Market Value of the Common Stock as of the
     preceding August 17 and will permanently cease to accrue, and dividends
     accrued and unpaid with respect to any partial dividend period prior to
     such date will not be payable, if the Fair Market Value of the Common
     Stock, at any time after the effectiveness date of the initial registration
     covering the public resale of the shares of Common Stock issuable upon the
     exercise of the Series A Preferred Shares equals or exceeds the average
     Closing Price (as defined) multiplied by 2 for the 25 day period following
     the effective date of the Initial Registration. In accordance with these
     terms no such dividends will accrue for the period from August 2006 through
     July 2007. For the years ended December 31, 2006 and 2005, dividends in the
     amount of $0 and $46,667, respectively were accrued related to the Series A
     Preferred Shares outstanding. At December 31, 2006 and 2005, dividends
     accrued amounted to $312,667.

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

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

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

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

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

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

         During July 2004, the Company carried out a private placement in which
     units were offered at $50,000 per unit, with each unit consisting of
     100,000 shares of the Company's common stock and 100,000 warrants for the
     purchase of the Company's common stock. Each warrant entitles the holder to
     purchase one share of common stock at a price of $1.00 per share for a
     period of five years that commenced on the closing date of the offering. As
     a result of this offering, the Company issued 720,000 common shares and
     warrants and recognized $360,000 during 2004. 720,000 warrants are
     outstanding at December 31, 2006.

                                       45
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

         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. 100,000 warrants are outstanding at December 31,
     2006.

         A summary of the outstanding warrants as of December 31, 2006 and 2005
     is presented below:

         Outstanding, December 31, 2004                         1,220,000
              Exercised                                                --
              Forfeited                                          (100,000)
                                                             ------------

         Outstanding, December 31, 2005                         1,120,000
              Exercised                                           (30,508)
              Forfeited                                          (269,492)
                                                             ------------

         Outstanding, December 31, 2006                           820,000
                                                             ============

NOTE 13 - STOCK OPTION PLANS

         During 2002, the stockholders approved the adoption of the 2002 Stock
     Option Plan (the 2002 Plan). The purpose of the 2002 Plan is to provide a
     means whereby directors and selected employees, officers, agents,
     consultants and independent contractors of the Company may be granted
     incentive stock options and/or nonqualified stock options to purchase
     shares of common stock in order to attract and retain the services or
     advice of such directors, employees, officers, agents, consultants, and
     independent contractors. A total of 1,600,000 shares of common stock have
     been made available. The options under this plan vest as dictated in the
     individual stock option agreements and expire five years from date of grant
     for a 10% stockholder and ten years from date of grant for all others. At
     December 31, 2006 and 2005, 717,500 and 192,500 options, respectively have
     been granted under this Plan, all of which were granted at market value.

         During 1999, the stockholders approved the adoption of the 1999 Stock
     Option Plan (the 1999 Plan). The purpose of the 1999 Plan is to provide a
     means whereby directors and selected employees, officers, agents,
     consultants and independent contractors of the Company may be granted
     incentive stock options and/or nonqualified stock options to purchase
     shares of common stock in order to attract and retain the services or
     advice of such directors, employees, officers, agents, consultants, and
     independent contractors. A total of 1,300,000 shares of common stock have
     been made available. The options under this Plan vest over a five-year
     period, in 20% increments on each successive anniversary of the date of the
     grant, with varying expiration dates. At December 31, 2006, 1,300,619
     options have been granted under the 1999 plan of which 725,000 options have
     been granted below market price and for which 160,296 and 70,619 options
     have been exercised through December 31, 2006 and 2005, respectively.
     Expired or forfeited options were 400,323 and 360,000 for December 31, 2006
     and 2005, respectively.

                                       46
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

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

         In March 2005, the Securities and Exchange Commission ("SEC") issued
     Staff Accounting Bulletin No. 107 ("SAB No. 107"), "Share-Based Payment",
     providing guidance on option valuation methods, the accounting for income
     tax effects of share-based payment arrangements upon adoption of SFAS No.
     123 (R), and the disclosures in MD&A subsequent to the adoption. On April
     14, 2005, the SEC adopted a new rule that amended the compliance dates for
     SFAS No. 123(R). The Company adopted SFAS No. 123(R) and provides SAB No.
     107 required disclosures, using the modified prospective method with no
     restatement. Stock compensation expense to be recorded subsequent to
     December 31, 2005 for the unvested portion of existing awards is not
     material. In January 2006, the Company granted 525,000 options that vested
     immediately. The options have an estimated fair value of $132,300, which
     was recorded as compensation expense in 2006. The impact of future option
     or stock grants is dependent upon the quantity and nature of future
     stock-based compensation grants.

         In February 2006, the FASB issued Staff Position No. FAS 123(R)-4,
     "Classification of Options and Similar Instruments Issued as Employee
     Compensation That Allow for Cash Settlement upon Occurrence of a Contingent
     Event." This position amends SFAS 123(R) to incorporate that a cash
     settlement feature that can be exercised only upon the occurrence of a
     contingent event that is outside the employee's control does not meet
     certain conditions in SFAS 123(R) until it becomes probable that the event
     will occur.

         We adopted SFAS No. 123(R) on January 1, 2006. As a result, we
     recognized stock-based compensation cost, measured using the Black-Scholes
     option model, for vested and new options granted beginning January 1, 2006.
     Also, as required by SFAS No. 123(R), $453 of deferred stock compensation
     expense was reclassified as paid-in capital as of January 1, 2006. We
     recorded stock based compensation cost of $132,550 for the year ended
     December 31, 2006. The income tax benefit recognized for stock based
     compensation was $53,705 for the year ended December 31, 2006. Eighty nine
     thousand six hundred sixty seven stock options were exercised resulting in
     proceeds to the Company of $1,500 during the year ended December 31, 2006.
     No stock options were exercised during the year ended December 31, 2005.
     The fair value of these options was $.35 calculated by using the
     Black-Scholes options pricing model. Assumptions used in this calculation
     include an estimated term of three years, volatility of 89%, a risk-free
     interest rate of 4.35%, a 0% dividend rate, and an estimated forfeiture
     rate of 28%.

         Compensation expense related to these options was $132,550 and $1,082
     for employees and directors for the years ended December 31, 2006 and 2005,
     respectively.

                                       47
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

         A summary of the status of the Company's stock option plans as of
     December 31, 2006 and 2005 is presented below:

<TABLE>
<CAPTION>

                                                                          Weighted Average        Intrinsic
                                                           Shares          Exercise Price           Value
                                                      ---------------     ---------------     ---------------
<S>                                                           <C>               <C>                  <C>
Outstanding, January 1, 2006                                1,062,500           $1.00         $     1,700,000
    Exercised                                                 (89,677)          (0.68)               (172,161)
    Granted                                                   525,000            0.60               1,050,000
    Forfeited                                                 (40,323)          (1.00)                (64,533)
                                                      ---------------     ---------------     ---------------

Outstanding, December 31, 2006                              1,457,500           $0.87         $     2,513,306
                                                      ===============     ===============     ===============

Options exercisable, December 31, 2006                      1,455,000           $0.87         $     2,510,056
                                                      ===============     ===============     ===============
Weighted average fair value per share of options
    granted during the year ended December 31, 2006                             $0.35
                                                                          ===============
<CAPTION>

                                                                         Weighted Average
                                                           Shares         Exercise Price
                                                      ---------------     ---------------

<S>                                                         <C>                 <C>
Outstanding, January 1, 2005                                1,072,500           $1.00
    Exercised                                                      --              --
    Granted                                                        --              --
    Forfeited                                                 (10,000)          (0.75)
                                                      ---------------     ---------------

Outstanding, December 31, 2005                              1,062,500           $1.00
                                                      ===============     ===============

Options exercisable, December 31, 2005                      1,014,164           $1.02
                                                      ===============     ===============

Weighted average fair value per share of options
    granted during the year ended December 31, 2005                                --
                                                                          ===============
</TABLE>

                                       48
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

         The following tables summarize information about options outstanding at
     December 31, 2006 and 2005:
<TABLE>
<CAPTION>

                               2006                                               2006
                        Options Outstanding                                 Options Exercisable
--------------------------------------------------------------------   -------------------------------
                                       Weighted
                    Number             Average           Weighted          Number           Weighted
  Range of       Outstanding at       Remaining          Average         Outstanding        Average
  Exercise        December 31,        Contractual        Exercise       at December 31,     Exercise
   Prices            2006             Life (Years)        Price             2006            Price
--------------   ----------------  -----------------  --------------   ----------------  -------------
<S>                   <C>                 <C>               <C>             <C>              <C>
    $0.05             105,000             0.96              $0.05           105,000          $0.05
$0.33 - $0.75         720,000             3.66               0.59           720,000           0.59
$1.12 - $1.50         532,500             1.97               1.18           530,000           1.23
    $2.00             100,000             1.25               2.00           100,000           2.00
                 ----------------                                      ---------------
                    1,457,500                                             1,455,000
                 ================                                      ===============
<CAPTION>

                               2005                                               2005
                        Options Outstanding                                 Options Exercisable
--------------------------------------------------------------------   -------------------------------
                                       Weighted
                    Number             Average           Weighted          Number           Weighted
  Range of       Outstanding at       Remaining          Average         Outstanding        Average
  Exercise        December 31,        Contractual        Exercise       at December 31,     Exercise
   Prices             2005            Life (Years)        Price             2005            Price
--------------   ----------------  -----------------  --------------   ----------------  -------------
<S>                   <C>                 <C>               <C>             <C>              <C>
    $0.05             135,000             1.96              $0.05           135,000          $0.05
$0.33 - $0.90         195,000             3.07               0.56           151,664           0.56
$0.91 - $1.50         632,500             1.97               1.18           627,500           1.18
$1.51 - $2.00         100,000             2.25               2.00           100,000           2.00
                 ----------------                                      ---------------
                    1,062,500                                             1,014,164
                 ================                                      ===============
</TABLE>

NOTE 14 - COMMITMENTS AND CONTINGENCIES

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

NOTE 15 - CONCENTRATION OF RISK

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

                                       49
<PAGE>

                                  CIMNET, INC.
                          NOTES TO FINANCIAL STATEMENTS

                           December 31, 2006 and 2005

         During 2006, the Company had sales to one customer totaling $1,433,229
     and sales to another customer totaling $1,100,250, of which $577,231 and
     $247,184, respectively, was outstanding at December 31, 2006.

         During 2005, the Company had sales to one customer totaling $1,094,613
     of which $397,435 was outstanding at December 31, 2005.

         No other significant concentrations existed at December 31, 2006 and
     2005.

NOTE 16 - RECENTLY ISSUED ACCOUNTING STANDARDS

         In July 2006, the Financial Accounting Standards Board (FASB) issued
     FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes."
     The interpretation clarifies the accounting for uncertainty in income taxes
     recognized in a company's financial statements in accordance with Statement
     of Financial Accounting Standards No. 109, "Accounting for Income Taxes."
     Specifically, the pronouncement prescribes a recognition threshold and a
     measurement attribute for the financial statement recognition and
     measurement of a tax position taken or expected to be taken in a tax
     return. The interpretation also provides guidance on the related
     de-recognition, classification, interest and penalties, accounting for
     interim periods, disclosure and transition of uncertain tax positions. The
     interpretation is effective for fiscal years beginning after December 15,
     2006. The Company has evaluated this pronouncement on the Company's
     financial statements and has concluded that FIN 48 does not have a material
     effect on the Company's financial statements.



                                       50
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.


Dated:     March 30, 2007
           Wyomissing, Pennsylvania

                                       CIMNET, INC.


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

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

Signature                         Title                           Date


/s/ JOHN D. RICHARDSON, III       Chairman of the Board,          March 30, 2007
-----------------------------     Chief Executive Officer,
John D. Richardson, III           and Principal Accounting Officer


/s/ WILLIAM NYMAN                 Director and Vice President     March 30, 2007
-----------------------------     of Integration Services
William Nyman


/s/ DAVID BIRK                    Director                        March 30, 2007
-----------------------------
David Birk


/s/ KARL GERHART                  Director                        March 30, 2007
-----------------------------
Karl Gerhart


/s/ J. JEFFREY FOX                Director                        March 30, 2007
-----------------------------
J. Jeffrey Fox


/s/ SUNDARESH RAMAYYA             Director                        March 30, 2007
-----------------------------
Sundaresh Ramayya


                                       51