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U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB x
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2004o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES
EXCHANGE ACT OF 1934For the transition period from

to .
 Commission file number 0-26599 SIMEX Technologies, Inc. (Exact name of registrant as specified in its charter) Delaware
(State or other jurisdiction of
incorporation or organization)
    
    58-2465647
(I.R.S. Employer
Identification No.)
 4940 Peachtree Industrial Blvd.,
Suite 360
Atlanta, Georgia
(Address of principal executive offices)
    
    30071
(Zip Code)
 Registrants telephone number, including area code(770) 447-9373 Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes x No o Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes o No o




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Applicable only to corporate issuers State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date. As of June 30, 2004, there
were 33,340,303 shares of common stock, par value $.001 per share, outstanding. 2




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SIMEX Technologies, Inc. TABLE OF CONTENTS  
 PART IITEM 1 Financial Statements
    
    
    5ITEM 2 Managements Discussion and Analysis or Plan of Operation
    
    
    12ITEM 3 Controls and Procedures
    
    
    14PART IIITEM 1 Legal Proceedings
    
    
    15ITEM 2 Changes in Securities and Use of Proceeds
    
    
    15ITEM 3 Defaults Upon Senior Securities
    
    
    15ITEM 4 Submission of Matters to a Vote of Security Holders
    
    
    15ITEM 5 Other Information
    
    
    15ITEM 6 Exhibits and Reports on Form 8-K
    
    
    16EX-31.1 302 Certification of CEOEX-31.2 302 Certification of CFOEX-32.1 906 Certification of CEOEX-32.2 906 Certification of CFO
 3




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PART I This Quarterly Report includes forward-looking statements within the meaning of
the Securities Exchange Act of 1934 (the Exchange Act). These statements are
based on managements beliefs and assumptions, and on information currently
available to management. Forward-looking statements include the information
concerning possible or assumed future results of operations of the Company set
forth under the heading Managements Discussion and Analysis of Financial
Condition or Plan of Operation. Forward-looking statements also include
statements in which words such as expect, anticipate, intend, plan,
believe, estimate, consider or similar expressions are used. Forward-looking statements are not guarantees of future performance. They
involve risks, uncertainties and assumptions. The Companys future results and
shareholder values may differ materially from those expressed in these
forward-looking statements. Readers are cautioned not to put undue reliance on
any forward-looking statements. 4




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Item 1. Financial Statements SIMEX TECHNOLOGIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
(In thousands) June 30, 2004ASSETSCurrent assets:Cash and cash equivalents
    
    $
    23Accounts receivable
    
    
    226Inventories
    
    
    422Notes and loans receivable
    
    
    114Total assets
    
    $
    785LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    194Accrued expenses
    
    
    2Total current liabilities
    
    
    196Shareholders equity:Series B Convertible Preferred stock, $.001 par value, 1,496 shares
authorized and issued with no shares outstanding
    
    
    Common stock, $.001 par value. Authorized 50,000 shares; 33,340 shares
issued and outstanding
    
    
    33Additional paid-in capital
    
    
    10,253Accumulated deficit
    
    
    (9,667
    )Treasury stock, 10 shares at cost
    
    
    (30
    )Total shareholders equity
    
    
    589Total liabilities and shareholders equity
    
    $
    785
 See accompanying notes to condensed consolidated
financial statements. 5




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SIMEX TECHNOLOGIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except per share data) Three months ended
    
    Six months endedJune 30
    
    June 302004
    
    2003
    
    2004
    
    2003Revenues
    
    $
    716
    
    
    $
    
    
    
    $
    1,684
    
    
    $
    Cost of goods sold
    
    
    526
    
    
    
    
    
    
    
    1,278
    
    
    
    Gross Profit
    
    
    190
    
    
    
    
    
    
    
    406
    
    
    
    Selling, general and administrative expenses
    
    
    266
    
    
    
    115
    
    
    
    582
    
    
    
    210Interest (income) expense  net
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    (3
    )Net loss
    
    $
    (76
    )
    
    $
    (114
    )
    
    $
    (176
    )
    
    $
    (207
    )Loss per shareBasic and diluted loss per share
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )
 See accompanying notes to condensed consolidated
financial statements. 6




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SIMEX TECHNOLOGIES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands) Six months ended June 302004
    
    2003Cash flows from operating activitiesLoss from operations
    
    $
    (176
    )
    
    $
    (207
    )Adjustments to reconcile net loss to net cash used in operating activitiesChanges in operating assets and liabilitiesAccounts receivable
    
    
    (181
    )
    
    
    Inventories
    
    
    104
    
    
    
    Accounts payable and accrued expenses
    
    
    150
    
    
    
    72Net cash used in operating activities
    
    
    (103
    )
    
    
    (135
    )Cash flows from investing activitiesNotes receivable
    
    
    106
    
    
    
    (474
    )Net cash provided by (used in) investing activities
    
    
    106
    
    
    
    (474
    )Cash flows from financing activitiesNet cash used in financing activities
    
    
    
    
    
    
    Net change in cash and cash equivalents
    
    
    3
    
    
    
    (609
    )Cash and cash equivalents at beginning of period
    
    
    20
    
    
    
    681Cash and cash equivalents at end of period
    
    $
    23
    
    
    $
    72
 See accompanying notes to condensed consolidated
financial statements. 7




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SIMEX TECHNOLOGIES INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2004 and 2003
(Unaudited)
(In thousands, except per share data) Note 1: Basis of Presentation On December 5, 2003, the Company acquired Remote Business, Inc. (RBI), a
newly-formed subsidiary of Probity Investigations, Inc. (Probity), in
exchange for 16,000,000 newly-issued shares of the Companys common stock.
Immediately prior to the acquisition, Probity transferred security equipment
inventory with a fair value of $550,000 and the operations of its subsidiary,
Remote Business Management, LLC (RBMLLC), excluding all recorded assets and
liabilities of RBMLLC, to RBI. The acquisition was accounted for as a
purchase. Because the Company was a non-operating company at the time of the
transaction and the common shares of the Company are thinly-traded, the
purchase price was deemed to be the fair value of the assets acquired.
Accordingly, no goodwill was recorded in the acquisition. Effective January 16, 2004, a wholly-owned subsidiary of the Company, Simex
Digital Solutions, Inc. (Simex Digital) entered into a marketing agreement
with Structured Data Systems, Inc. (SDS), a Georgia corporation. SDS is a
value-added reseller of computer hardware and software. Under the marketing
agreement, Simex Digital markets the products sold by SDS. Operating results
for the period from the date of the marketing agreement are included in this
Form 10-QSB. Our common stock is registered with the Securities and Exchange Commission
(SEC) and was quoted on the over the counter bulletin board under the symbol
SMXT until September 24, 2003. The Company did not file its June 30, 2003 Form
10-QSB by the required extended filing date of August 19, 2003. As a result,
the Company became delinquent, and had 30 days to file its Form 10-QSB for the
period ended June 30, 2003 or the Company would be ineligible for quotation on
the over-the-counter bulletin board. The Company filed its Form 10-QSB on
September 23, 2003, however, the quarterly report was not reviewed by the
Companys Certified Public Accountants. Therefore, the Company failed to meet
its reporting requirements and the Company became ineligible for quotation on
the over-the-counter bulletin board on September 24, 2003. There was no
disagreement with the Companys Certified Public Accountants, which prevented
their review. Their review was not performed because the Company did not
provide them with a timely accounting of transactions involving the reverse
acquisition with Probity Investigations, Inc., which occurred on May 20, 2003
and the subsequent rescission of the reverse acquisition, which was executed on
September 18, 2003. An amended Form 10-QSB for the quarter ended June 30, 2003
was filed on October 17, 2003. The Company has subsequently filed all of its
required annual, quarterly and current reports, and was reinstated for
quotation on OTCBB as of June 25, 2004. Note 2: Nature of Operations and Summary of Significant Accounting Policies The accompanying consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
of America and in accordance with the SECs instructions applicable to Form
10-QSB interim financial information. In the opinion of management, such
consolidated financial statements include all adjustments, consisting of normal
recurring adjustments, necessary to present fairly the financial position,
results of operations and cash flows as of June 30, 2004 and for all periods
presented. The results of operations presented in the accompanying
consolidated financial statements are not necessarily indicative of the results
expected for the full fiscal year or for any future period. 8




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The accompanying consolidated financial statements do not include all of the
information and disclosures required by accounting principles generally
accepted in the United States of America for annual financial statements. Such
interim consolidated financial statements should be read in conjunction with
Simexs 2003 financial statements and notes thereto included in Simexs annual
report on Form 10-KSB for the year ended December 31, 2003. Certain
reclassifications have been made to the 2003 financial information to conform
to the presentation in 2004. Disclosures contained in that document have been
omitted. The results of operations for the periods presented are not
necessarily indicative of the operating results for the full year. Nature of Operations Remote Business, Inc., a wholly-owned subsidiary of the Company, is engaged in
the design, installation, servicing and monitoring of digital surveillance
security systems for business and industry. The accompanying financial
statements include the accounts of RBI since its formation on December 5, 2003
and the assets, liabilities, revenues and expenses applicable to the business.
The acquisition of RBI included the business of its predecessor, RBM, which has
operated for the past two years. Most of the customers of RBI are small to
medium-sized businesses located in the southeastern U.S. The largest customer
is a restaurant franchise chain headquartered in the southeast and constituted
approximately 50% of the business of RBI and its predecessor, RBM, during the
year ended December 31, 2003. The business with this chain was contracted with
each individual franchisee and not with the franchisor. The balance of the
business was spread across a number of customers. RBI generally provides the design and installation of security systems to meet
its customers requirements. Most of the work is new systems, but on occasion
old systems are upgraded with new equipment. In some instances RBI is engaged
to do alarm monitoring. These monitoring contracts are, at present, fulfilled
by third-party monitoring companies. Simex Digital Solutions, Inc., a wholly-owned subsidiary of the Company, is a
value-added reseller of computer hardware and software, pursuant to a marketing
agreement with Structured Data Systems, Inc., effective January 16, 2004.
Simex Digitals customers range from public school administrations to small and
medium-sized private businesses. Net Loss Per Share The net loss per share computations for June 30, 2004 and 2003 reflect
33,340,303 and 16,554,908 shares of outstanding common stock, respectively. Basic and diluted net loss per share is computed by dividing the net loss for
the period by the weighted-average number of common shares outstanding for the
period. Because there was a net loss for both periods presented, the effect of
common stock equivalents was not considered in computing diluted loss per
share, since the effect would have been anti-dilutive. Note 3: Factors Affecting Operations Effective January 16, 2004, a wholly-owned subsidiary of the Company, Simex
Digital Solutions, Inc. (Simex Digital) entered into a marketing agreement
with Structured Data Systems, Inc. (SDS), a Georgia corporation. SDS is a
value-added reseller of computer hardware and software. Under the marketing
agreement, Simex Digital markets the products sold by SDS. Operating results
for the period from the date of the marketing agreement are included in this
Form 10-QSB. The Company incurred a net loss of $(76), in the three month period ended June
30, 2004. Working capital and stockholders equity as of June 30, 2004 each
were $589. The future success of the Company is contingent upon, among other
things, the ability to efficiently manage its newly-acquired operations, and
attract additional acquisition candidates that are strategically aligned with
such operations. 9




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Note 4: Notes and Loans Receivable In conjunction with the May 20, 2003, reverse acquisition agreement with
Probity, the Company had advanced Probity approximately $530 as of December 31,
2003. Included in the $530 advances were separate notes in the amounts of $262
and $137, which matured as of June 25, 2003. These notes are collateralized by
inventory and carry interest at 10% per annum. Additional loans in the amount
of $131, made prior to December 31, 2003 are unsecured and not subject to
interest. To date no interest has been collected or accrued. The Company subsequently exchanged its notes and loans receivable, which
totaled $560 as of the date of the exchange, for inventory of Kyros a wholly
owned subsidiary of Probity. The inventory consisted of video monitoring
equipment purchased by Kyros from Wooju Communications Co., Ltd. (Wooju), a
South Korean manufacturing company and a member of Kyros LLC. At the request
of Wooju, the equipment was immediately sold, on behalf of Simex, to Kjell
Jagelid and Montain Sebring Generale Holding, S.A., a Luxembourg holding
company related to the Companys CEO, Kjell Jagelid, for $560, for further
sale, in the amount of $560, by Kjell Jagelid and Montain Sebring Generale
Holding, S.A. to Wooju. The Company received from Kjell Jagelid and Montain
Sebring Generale Holding, S.A., a partial payment on the sale of $112 on
September 11, 2003. Additional amounts totaling $448 were paid by Wooju to
Kjell Jagelid and Montain Sebring Generale Holding, S.A. between the
transaction date and December 31, 2003, to be held by Kjell Jagelid and Montain
Sebring Generale Holding, S.A. as agent for the Company. All of these
additional proceeds have been remitted to the Company by Kjell Jagelid and
Montain Sebring Generale Holding, S.A. during the fourth quarter of 2003 and
the first six months of 2004. In conjunction with the acquisition of Remote Business, Inc., the Company
advanced $35 to Remote Business Management, LLC to assist in meeting its
short-term capital needs. Note 5: Equity Preferred Stock Simex authorized the issuance of 928 shares of $.001 par value Series A
Convertible Preferred Stock. The Series A has no voting rights, but can pay a
2.5% annual dividend, when and if declared by the Companys Board of Directors.
All of the authorized shares of Series A Convertible Preferred Stock were
issued in conjunction with the May 20, 2003 Probity reverse acquisition
agreement , and were subsequently converted into 9,280 shares of common stock
on or about August 4, 2003. The common shares were returned to the Company
under the terms of the September 18, 2003 Rescission Agreement. As a result of the conversion of all of the Series A Convertible Preferred
Stock, there are no longer any shares of Series A Convertible Preferred Stock
authorized for issuance. Simex is authorized to issue 1,496,042 shares of $.001 par value Series B
Convertible Preferred Stock. The Series B holders vote with common
stockholders as if the Series B shares were converted to common at 10 shares of
common for each share of preferred, but the Series B does not pay dividends.
All of the authorized shares of Series B Convertible Preferred Stock were
issued in conjunction with the May 20, 2003 Probity reverse acquisition
agreement, which were subsequently returned to the Company under the terms of
the September 18, 2003 Rescission Agreement. As was previously reported, the Company entered into Stock Purchase Agreements
with Wooju on May 7, 2004, which were scheduled to close on May 31, 2004.
After extending the closing of the Stock Purchase Agreements, it was determined
by the parties that the proposed transaction could not be closed in compliance
with Korean regulations. On August 10, 2004 the companies announced their
inability to complete the transaction in a press release, and on August 16,
2004, the Company reported the same in an 8-K report. 10




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Common Stock Simex is authorized to issue 50,000,000 shares of $0.001 par value common
stock, of which 33,340,303 shares were issued and outstanding as of June 30,
2004. Common Stock Options On May 20, 2003, the Company entered into Stock Option Agreements with certain
of its officers, directors and consultants, and issued options to purchase
6,499,287 shares in connection with the original acquisition of Probity.
Options issued pursuant to these Agreements are exercisable for a period of 10
years from the date of issuance, at $.05 per share. The Agreements were
restated on July 25, 2003, and restated again on September 15, 2003, in
connection with the rescission of the Probity acquisition transaction. In July
2003, the Board of Directors also approved an amendment to the stock option
plan to reserve up to 20% of the total outstanding shares. These restatements
resulted in the following option agreements: NumberName
    
    Title
    
    of OptionsC. Mickle Moye
    
    Chairman of the Board of Directors
    
    
    865,557Kjell I. Jagelid
    
    Chief Executive Officer and Director
    
    
    1,731,115Scott Demerau*
    
    Director
    
    
    865,557Arnold E. Johns
    
    Consultant
    
    
    865,557Total
    
    
    
    
    
    
    4,327,786
   *
    
    Mr. Demerau exercised his options on December 5, 2003. On January 10, 2004, the Board of Directors resolved to award options to its
Officers, Directors and consultants, as follows: NumberName
    
    Title
    
    of OptionsKjell I. Jagelid
    
    Chief Executive Officer and Director
    
    
    1,000,000C. Mickle Moye
    
    Chairman of the Board of Directors
    
    
    500,000Arnold E. Johns
    
    Consultant
    
    
    500,000Fred J. Griffin
    
    Consultant
    
    
    250,000Total
    
    
    
    
    
    
    2,250,000
 These options are exercisable for a period of 10 years, at a price equal to
$.35 per share. The following table presents the status of the Companys stock option plan for
the years ended December 31, 2002, 2003 and the six months ended June 30, 2004. 11




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QUALIFIED PLANS
Weighted Average Options Exercise Price Outstanding at December 31, 2002
    
    
    Granted
    
    
    4,327,786Exercised
    
    
    865,557Forfeited or Cancelled
    
    
    Outstanding at December 31, 2003
    
    
    3,462,229Granted
    
    
    2,250,000Exercised
    
    
    Forfeited or Cancelled
    
    
    Outstanding at June 30, 2004
    
    
    5,712,229
 Income Taxes The Company has recorded no benefit for income taxes in the accompanying
consolidated financial statements. A valuation allowance has been recorded to
offset the recognition of any deferred tax assets due to the uncertainty of
future realization. 
 ITEM 2. Managements Discussion and Analysis or Plan of Operation The following discussion contains forward-looking statements that involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of many factors.
The following discussion should be read together with our financial statements
and the notes to those financial statements included elsewhere in the Companys
annual report on Form 10-KSB for the year ended December 31, 2003. Except for historical information, the materials contained in this Managements
Discussion and Analysis are forward-looking (within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934) and involve a number of risks and uncertainties. These include the
Companys historical losses, the need to manage its growth, general economic
downturns, and other risks detailed from time to time in the Companys filings
with the Securities and Exchange Commission. Although forward-looking
statements in this Quarterly Report reflect the good faith judgment of
management, such statements can only be based on facts and factors currently
known by the Company. Consequently, forward-looking statements are inherently
subject to risks and uncertainties, actual results and outcomes may differ
materially from the results and outcomes discussed in the forward-looking
statements. Readers are urged to carefully review and consider the various
disclosures made by the Company in this Quarterly Report, as an attempt to
advise interested parties of the risks and factors that may affect the
Companys business, financial condition, and results of operations and
prospects. The following analysis compares the results of operations for the three-month
periods ended June 30, 2004 and 2003. Results of Operations (In thousands) Sales and Gross Profit The Company, through its newly-acquired subsidiary, Remote Business, Inc.,
reported sales and service revenues from installations of surveillance
equipment of $168, resulting in a gross profit of $74. The Companys
newly-formed subsidiary, Simex Digital Solutions, Inc. reported sales of
hardware and software of $548, resulting in a gross profit of $116. For the
six months ended June 30, 2004, Remote Business, Inc. reported sales and
service revenues of $399, resulting in gross profit of $181, and Simex Digital
Solutions, Inc. reported sales of $1,285, resulting in gross profit of $225. 12




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Selling, General and Administrative Expenses Selling, general and
administrative expenses of Simex decreased to $61 for the
quarter ended June 30, 2004 from $115 for the quarter ended June 30, 2003.
Selling, general and administrative expenses for RBI and SDS were $78 and $127,
respectively. These figures reflect, among other issues, some duplication of
both personnel and facilities in the early stages of their operations. For the
six months ended June 30, 2004, Simex selling, general and administrative
expenses decreased to $154 from $210 for the six months ended June 30, 2003.
The decrease in both the three month and six month selling, general and
administrative expenses for Simex was due to reduced legal and other fees
connected with the acquisition of Probity in 2003. Net Loss During the quarter ended June 30, 2004, the Company had a net loss of $(76) or
$(0.01) per diluted weighted-average share. During the quarter ended June 30,
2003, the Company reported a net loss of $(114) or $(0.01) per diluted
weighted-average share. The $38 decrease in net loss for the quarter ended June
30, 2004, was primarily due to the elimination of administrative expenses
incurred in connection with the acquisition of Probity in May 2003, as well as
the gross profit contributions from the Companys operating subsidiaries in
2004. For the six months ended June 30, 2004, the Company had a net loss of
$(176) or $(0.01) per diluted weighted-average share, compared with $(207) or
$(0.01) per diluted weighted-average share for the six months ended June 30,
2003. The improvement was due to the reduction in legal and other expenses
connected with the Probity acquisition in 2003, and the gross profit
contributions from the Companys operating subsidiaries in 2004. Financial Condition, Liquidity and Capital Resources (in thousands) The accompanying unaudited financial statements indicate that the Company has
limited liquidity, and will require additional funds to meet its short-term
working capital requirements. These additional funds are expected to be
derived from distribution arrangements concerning its inventories and from the
proceeds of additional financing transactions and sales of its securities. If
necessary funds are not available, the Companys business and operations would
be materially adversely affected and in such event, the Company would attempt
to reduce costs and adjust its business plan. Operating Activities Cash flows used in operating activities for the six months ended June 30, 2004
aggregated $(103) compared to cash used in operating activities for the six
ended June 30, 2003 of $(135). The unfavorable impact on operating cash flows
for the six months ended June 30, 2004 was primarily due to increased cash flow
requirements of the Companys operating subsidiaries, especially the $181
increase in accounts receivable. The unfavorable impact on operating cash
flows for the six months ended June 30, 2003 was primarily due to the $(207)
net loss from operations. Investing Activities Cash provided (used) by investing activities for the six months ended June 30,
2004 and 2003 aggregated $106 and $(474), respectively. The cash provided for
the six months ended June 30, 2004 was primarily attributable to the proceeds
of notes receivable, representing the retainage by Kjell Jagelid and Montain
Sebring Generale, S.A. of proceeds from the sale of equipment pursuant to the
exchange of notes receivable with Kyros. The cash used for the six months
ended June 30, 2003 was due to a loan to Probity, Inc. pursuant to a planned
acquisition of Probity, which was later rescinded. Financing Activities There were no cash flows provided or used by financing activities for the six
months ended June 30, 2004 or 2003. 13




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Managements Plans The Companys resources consisted of $23 in cash and cash equivalents as of
June 30, 2004. The Company continues to seek operating companies with viable
products or services strategically related to its core business that have
growth potential. Effective January 16, 2004, a wholly-owned subsidiary of the Company, Simex
Digital Solutions, Inc. (Simex Digital) entered into a marketing agreement
with Structured Data Systems, Inc. (SDS), a Georgia corporation. SDS is a
value-added reseller of computer hardware and software. Under the marketing
agreement, Simex Digital markets the products sold by SDS. The Company has a limited amount of cash reserves, and is dependent upon the
performance of its operating subsidiaries, and cash flow resulting therefrom,
to meet its operating cash requirements. Since the acquisition of these
subsidiaries is relatively recent and the Companys operating history with
these entities is brief, the Company can give no assurances as to the ability
of its operations to generate sufficient funds to meet its needs. As was previously reported, the Company entered into Stock Purchase Agreements
on May 7, 2004, which were scheduled to close on May 31, 2004. After extending
the closing of the Stock Purchase Agreements, it was determined by the parties
that the proposed transaction could not be closed in compliance with Korean
regulations. On August 10, 2004 the companies announced their inability to
complete the transaction in a press release, and on August 16, 2004, the
Company reported the same in an 8-K report. As a publicly traded company subject to ongoing reporting requirements with the
Securities and Exchange Commission (SEC), the Company will continue to incur
significant expenses to maintain current reporting status with the SEC. These
expenses are likely to increase in coming periods based on more stringent
reporting requirements and public oversight initiatives that have been or are
being adopted by the SEC in response to corporate governance concerns and
recent corporate scandals and abuses. Audit and professional fees will increase
as a result of these changes and the increases will impact the profitability of
the company in future periods. Critical Accounting Policies The discussion and analysis of the Companys financial condition and results of
operations are based upon its consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in
the United States. The preparation of these financial statements requires the
Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses. In consultation with its Board of
Directors, the Company has identified no accounting policies that it believes
are key to an understanding of its financial statements. 
 ITEM 3. Controls and Procedures Within ninety (90) days prior to the date of this report, an evaluation was
performed under the supervision and with the participation of the Companys
management, including the President and Chief Executive Officer (CEO) and the
acting Chief Financial Officer (CFO), of the effectiveness of the design and
operation of the Companys disclosure controls and procedures. Based on that
evaluation, the Companys management, including the CEO and CFO, concluded that
the Companys disclosure controls and procedures were effective in bringing to
their attention material information relating to the Company required to be
included in the Companys periodic SEC filings. There were no significant
changes in disclosure controls and procedures during the last fiscal quarter
that have significantly affected, or reasonably likely to affect, internal
control over financial reporting. 14




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PART II. OTHER INFORMATION 
 ITEM 1. Legal Proceedings In the ordinary course of business, the Company is from time to time involved
in various pending or threatened legal actions. The litigation process is
inherently uncertain and it is possible that the resolution of such matters
might have a material adverse effect upon our financial condition and/or
results of operations. However, in the opinion of our management, matters
currently pending or threatened against us are not expected to have a material
adverse effect on our financial position or results of operations. 
 ITEM 2. Changes in Securities and Use of Proceeds There have been no events that are required to be reported under this Item. 
 ITEM 3. Defaults Upon Senior Securities There have been no events that are required to be reported under this Item. 
 ITEM 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of the security holders during the quarter. 
 ITEM 5. Other Information In conjunction with the May 20, 2003, reverse acquisition agreement with
Probity, the Company had advanced Probity approximately $530 as of December 31,
2003. Included in the $530 advances were separate notes in the amounts of $262
and $137, which matured as of June 25, 2003. These notes are collateralized by
inventory and carry interest at 10% per annum. Additional loans in the amount
of $131, made prior to December 31, 2003 are unsecured and not subject to
interest. The Company subsequently exchanged its notes and loans receivable, which
totaled $560 as of the date of the exchange, for inventory of Kyros, which
consisted of video monitoring equipment purchased by Kyros from Wooju
Communications Co., Ltd. (Wooju), a South Korean manufacturing company and a
member of Kyros. At the request of Wooju, the equipment was immediately sold,
on behalf of Simex, to Kjell Jagelid and Montain Sebring Generale Holding,
S.A., a Luxembourg holding company related to the Companys CEO, Kjell Jagelid,
for $560, for further sale, in the amount of $560, by Kjell Jagelid and Montain
Sebring Generale Holding, S.A. to Wooju. The Company received from Kjell
Jagelid and Montain Sebring Generale Holding, S.A., a partial payment on the
sale of $112 on September 11, 2003. Additional amounts totaling $448 were paid
by Wooju to Kjell Jagelid and Montain Sebring Generale Holding, S.A. between
the transaction date and December 31, 2003, to be held by Kjell Jagelid and
Montain Sebring Generale Holding, S.A. as agent for the Company. A total of
$405 of these additional proceeds have been remitted to the Company by Kjell
Jagelid and Montain Sebring Generale Holding, S.A. during the fourth quarter of
2003 and the first quarter of 2004, and a balance of $43 remains held at March
31, 2004 for the Company by Kjell Jagelid and Montain Sebring General Holding,
S.A.. As was previously reported, the Company entered into Stock Purchase Agreements
on May 7, 2004, which were scheduled to close on May 31, 2004. After extending
the closing of the Stock Purchase Agreements, it was determined by the parties
that the proposed transaction could not be closed in compliance with Korean
regulations. On August 10, 2004, the companies announced their inability to
complete the transaction in a press release, and on August 16, 2004, the
Company reported the same in an 8-K report. 15




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ITEM 6. Exhibits and Reports on Form 8-K  (a)
    
    Exhibits 2.1
    
    Acquisition Agreement dated May 20, 2003 with Probity, Inc. (1)2.2
    
    Mutual Rescission Agreement (2)2.3
    
    Exchange Agreement dated September 15, 2003 by and between Probity
Investigations, Inc. and the Company (3)2.4
    
    First Amendment to Exchange Agreement with Probity Investigations, Inc. (4)10.1
    
    Dealer Marketing Agreement with Structured Data Systems, Inc. (5)31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer32.1
    
    Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
   (1)
    
    Incorporated by reference to our Current Report on Form 8-K dated May 20,
2003, and filed with the Commission on June 4, 2003.(2)
    
    Incorporated by reference to our Current Report on Form 8-K dated
September 19, 2003, and filed with the Commission on September 23, 2003.(3)
    
    Incorporated by reference to our Quarterly Report on Form 10-QSB for the
quarter ended September 30, 2003, and filed with the Commission on
November 14, 2003.(4)
    
    Incorporated by reference to our Current Report on Form 8-K dated December
5, 2003, and filed with the Commission on December 5, 2003.(5)
    
    Incorporated by reference to our Quarterly Report on Form 10-QSB for the
quarter ended March 30, 2004, and filed with the Commission on May 24,
2004.  (b)
    
    Reports on Form 8-KNo 8-K reports were filed during the quarter ended June 30, 2004. 16




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SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized. SIMEX TECHNOLOGIES, INC.Dated:
    
    August 23, 2004By:
    
    /s/ Kjell I. JagelidChief Executive Officer and PresidentBy:
    
    /s/ Fred J. GriffinChief Financial Officer 17