10-Q 2014-09-30 false Cimetrix Incorporated 0000786620 --12-31 45042006 Smaller Reporting Company Yes No No 2014 Q3 1615000 887000 715000 797000 36000 56000 85000 72000 250000 144000 2701000 1956000 68000 48000 64000 64000 960000 1194000 6000 6000 3799000 3268000 132000 56000 335000 178000 305000 273000 772000 507000 4000 4000 33867000 33774000 49000 49000 -30795000 -30968000 3027000 2761000 3799000 3268000 0.0001 0.0001 100000000 100000000 45042006 45042006 25000 25000 1277000 810000 3586000 2887000 279000 224000 858000 729000 1556000 1034000 4444000 3616000 64000 55000 237000 190000 1620000 1089000 4681000 3806000 578000 495000 1629000 1636000 315000 211000 840000 709000 223000 268000 774000 665000 365000 251000 1111000 858000 9000 16000 1490000 1241000 4382000 3918000 130000 -152000 299000 -112000 1000 1000 1000 2000 1000 1000 1000 8000 2000 3000 2000 11000 132000 -149000 301000 -101000 45000 -59000 -1429000 87000 -90000 173000 1328000 <!--egx--> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'><b>NOTE 1 &#150; ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'><b>Organization</b> &#150; Cimetrix Incorporated, a Nevada corporation, and its subsidiaries (Cimetrix or the Company) is a software engineering company that designs, develops, markets and supports factory connectivity and equipment control products for today&#146;s smart, connected factories. The Company&#146;s primary customers are original equipment manufacturers (OEMs) that supply precision electronics manufacturing equipment for semiconductor wafer fabrication, solar/photovoltaic (PV), high-brightness light-emitting diode (HB-LED) and other electronics manufacturing.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'><b>Basis of Presentation</b> &#150; The condensed consolidated financial statements include the accounts of the Cimetrix Incorporated and its wholly owned subsidiaries, Cimetrix Japan K.K., Cimetrix Europe, Inc. and Cimetrix Data Management Solutions, Inc. All significant inter-company accounts and transactions have been eliminated in consolidation. The interim financial information of the Company as of September 30, 2014 and for the three month and nine month periods ended September 30, 2014 and 2013 is unaudited, and the balance sheet as of December 31, 2013 is derived from audited financial statements. The accompanying condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles (U. S. GAAP) for interim financial statements. Accordingly, they omit or condense footnotes and certain other information normally included in financial statements prepared in accordance with U.S. GAAP. The accounting policies followed for quarterly financial reporting conform with the accounting policies disclosed in Note 1 to the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. In the opinion of management, all adjustments that are necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that can be expected for the entire year ending December 31, 2014. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'><b>Recent Accounting Pronouncements</b> &#150; In May 2014, the FASB issued Accounting Standards Update No. 2014-09, <i>Revenue from Contracts with Customers</i> (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'><b>NOTE 2 &#150; STOCK-BASED COMPENSATION</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (&#147;ASC&#148;) Topic 718<i>. </i>Stock-based compensation cost is measured at the grant date based on the estimated fair value of the award granted and recognized as expense over the period in which the award is expected to vest.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>The stock-based compensation expense has been allocated to the various categories of operating costs and expenses in a manner similar to the allocation of payroll expense as follows:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" style='line-height:115%;margin-left:26.2pt;border-collapse:collapse'> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Three Months Ended</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Nine Months Ended</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Cost of revenues</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$5,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$5,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$17,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$18,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Sales and marketing</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>5,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>3,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>15,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>9,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Research and development</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>5,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>4,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>15,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>12,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>General and administrative</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>15,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>8,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>46,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>25,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0in 0in 3.0pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Total stock-based compensation expense</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$30,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$20,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$93,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$64,000</p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>During the nine months ended September 30, 2014, options to purchase 282,500 shares of the Company&#146;s common stock were granted to the Company&#146;s employees and directors with an exercise price of $0.13 per share.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>As of September 30, 2014, the total unrecognized compensation cost related to non-vested stock-based awards was $195,000. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.01 years.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'><b>NOTE 3 &#150; EARNINGS PER SHARE</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>Basic earnings per share is computed by dividing net income for the period by the weighted-average number of common shares outstanding, including unissued but vested restricted stock shares deemed to be participating securities, during the period. Diluted earnings per common share is computed by dividing the net income for the period by the sum of the weighted-average number of common shares outstanding plus the weighted-average common stock equivalents which would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding options and unvested restricted stock. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury method.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>The following table sets forth the computation of basic and diluted earnings per common share:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" style='line-height:115%;margin-left:26.2pt;border-collapse:collapse'> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Three Months Ended</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Nine Months Ended</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Numerator:</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0in 0in 3.0pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Net income (loss)</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$87,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$(90,000)</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$173,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$1,328,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Denominator:</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Basic weighted average shares outstanding</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>45,227,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>45,227,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>45,227,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>45,499,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Effect of dilutive securities:</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Stock options</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>693,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>-</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>672,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>625,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0in 0in 3.0pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Diluted weighted average shares outstanding</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>45,920,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>45,227,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>45,899,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>46,124,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>&nbsp; </p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Net income (loss) per share</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Basic</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$0.03</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Diluted</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$0.03</p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>Potentially dilutive securities representing approximately 4,342,000 and 3,422,000 shares of common stock at September 30, 2014 and 2013, respectively, were excluded from the computation of diluted earnings per common share because their effect would have been anti-dilutive.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'><b>NOTE 4 &#150; DEBT</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'><b>Revolving Bank Line of Credit - </b>The Company and Silicon Valley Bank (the &#147;Bank&#148;) entered into a Loan and Security Agreement (&#147;Agreement&#148;), effective as of September 27, 2011. On September 26, 2012, the Company and the Bank entered into a First Amendment to the Loan and Security Agreement. The First Amendment extended the maturity date of the Agreement to September 25, 2013. On October 1, 2013, the Company and the Bank entered into a Second Amendment to the Agreement, effective September 25, 2013. The Second Amendment extended the maturity date of the Agreement to September 24, 2014, reduced the applicable interest rate and certain other fees associated with Agreement and increased the level of tangible net worth required to be maintained. On September 24, 2014, the Company and the Bank entered into a Third Amendment to the Loan and Security Agreement. The Third Amendment extended the maturity date of the Agreement to December 24, 2014 with no other changes to the Agreement.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>&nbsp;Line of credit advances are available to the Company in accordance with a defined &#147;Availability Amount&#148;, based in part on qualifying accounts receivable, up to a maximum of $1 million. The line of credit bears interest at the prime rate plus .75%, payable monthly. The line of credit is collateralized by substantially all operating assets of the Company. Interest payments are payable on the first day of each month with all principal advances payable on the maturity date of the line of credit.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>The line of credit agreement also contains numerous negative and affirmative covenants including, among others, restricting certain actions by the Company without the Bank&#146;s consent, such as are typically included in similar loan agreements, including restrictions on the payment of dividends, restrictions on incurring additional debt, prohibitions restricting major corporation transactions, including a sale of the business, and a requirement that the Company retain certain key employees.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>At September 30, 2014, the Company had no borrowings against the line of credit and management believes the Company was in compliance with all covenants.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'><b>NOTE 5 &#150; COMMON STOCK</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>The Company had 185,000 vested restricted stock awards for which shares of common stock have not been issued as of September 30, 2014 and December 31, 2013.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'><b>NOTE 6 &#150; RELATED PARTY TRANSACTIONS</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>During the three and nine month periods ended September 30, 2014 and 2013, the Company had the following revenues from one customer that was also a shareholder of the Company:</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'><b>&nbsp;</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" style='line-height:115%;margin-left:26.2pt;border-collapse:collapse'> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Three Months Ended</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Nine Months Ended</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>New software licenses</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$144,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$51,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$337,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$141,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Software license updates and product support</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>33,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>34,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>90,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>84,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;&nbsp;&nbsp;Total software revenues</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>177,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>85,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>427,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>225,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Professional services</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>-</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>-</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>13,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>-</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0in 0in 3.0pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;&nbsp;&nbsp;Total revenues</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$177,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$85,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$440,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$225,000</p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>The Company had accounts receivable from one customer that was also a shareholder totaling $88,000 and $22,000 at September 30, 2014 and December 31, 2013, respectively<b>.</b></p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'><b>NOTE 7 &#150; INCOME TAXES</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>The Company&#146;s income tax calculations are based on application of the respective U.S. federal and state laws. Accordingly, the Company recognizes tax liabilities based upon estimates of whether additional taxes will be due when such estimates are more likely than not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. To the extent the final tax liabilities are different than the amounts originally accrued, the increases or decreases are recorded as income tax expense or benefit in the Condensed Consolidated Statements of Operations.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>As part of the process of preparing consolidated financial statements, the Company is required to estimate income taxes in each of the jurisdictions in which it operates. This process involves estimating the Company&#146;s actual current income tax exposure together with assessing temporary differences resulting from differing treatment of items for income tax and financial accounting purposes. These temporary differences result in deferred tax assets and liabilities, the net amount of which is included in the Company&#146;s Condensed Consolidated Balance Sheets. When appropriate, the Company records a valuation allowance to reduce its deferred tax assets to the amount that the Company believes is more likely than not to be realized. Key assumptions used in estimating a valuation allowance include potential future taxable income, projected income tax rates, expiration dates of net operating loss and tax credit carry forwards, and ongoing prudent and feasible tax planning strategies.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>As of December 31, 2013, the Company had a net operating loss carry forward of approximately $17,105,000 that may be offset against future taxable income. Portions of the net operating loss carry forward expire at various times during the period from 2018 through 2034. Use of this net operating loss carry forward could also be limited in the event of substantial changes in the Company&#146;s ownership.</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>As of September 30, 2014, the calculated value of the deferred tax asset was $1,210,000, reflecting a decrease of $128,000 from December 31, 2013, as a result of the use of some of the operating loss carry forward to offset taxes that would have otherwise been due on the net income for the nine months ended September 30, 2014.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'><b>NOTE 8 &#150; SUBSEQUENT EVENTS</b></p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'><b>&nbsp;</b>On October 1, 2014, the Company filed with the Securities and Exchange Commission (the &#147;SEC&#148;) under Section 13(e) of the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), and Rule 13e-3 promulgated thereunder a Schedule 13E-3 Transaction Statement (the &#147;Schedule 13E-3&#148;), in connection with a proposed &#147;going private&#148; transaction. The primary purpose of the going private transaction is to reduce the number of record holders of the Company&#146;s common stock, par value $0.0001 per share (the &#147;Common Stock&#148;), to fewer than 300, thereby allowing the Company to terminate the registration of the Common Stock under Section 12(g) of the Exchange Act defined above and suspend its reporting obligations under Section 15(d) of the Exchange Act. The Reverse Stock Split may not be consummated until 20 days after the date on which the Company first mails the related Disclosure Statement to its stockholders.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'><b>Basis of Presentation</b> &#150; The condensed consolidated financial statements include the accounts of the Cimetrix Incorporated and its wholly owned subsidiaries, Cimetrix Japan K.K., Cimetrix Europe, Inc. and Cimetrix Data Management Solutions, Inc. All significant inter-company accounts and transactions have been eliminated in consolidation. The interim financial information of the Company as of September 30, 2014 and for the three month and nine month periods ended September 30, 2014 and 2013 is unaudited, and the balance sheet as of December 31, 2013 is derived from audited financial statements. The accompanying condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles (U. S. GAAP) for interim financial statements. Accordingly, they omit or condense footnotes and certain other information normally included in financial statements prepared in accordance with U.S. GAAP. The accounting policies followed for quarterly financial reporting conform with the accounting policies disclosed in Note 1 to the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. In the opinion of management, all adjustments that are necessary for a fair presentation of the financial information for the interim periods reported have been made. All such adjustments are of a normal recurring nature. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results that can be expected for the entire year ending December 31, 2014. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'><b>Recent Accounting Pronouncements</b> &#150; In May 2014, the FASB issued Accounting Standards Update No. 2014-09, <i>Revenue from Contracts with Customers</i> (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle is that a company should recognize revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this adoption on its consolidated financial statements.</p> <!--egx--><p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-indent:.5in;line-height:normal;text-autospace:none'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" style='line-height:115%;margin-left:26.2pt;border-collapse:collapse'> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Three Months Ended</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Nine Months Ended</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Cost of revenues</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$5,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$5,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$17,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$18,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Sales and marketing</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>5,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>3,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>15,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>9,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Research and development</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>5,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>4,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>15,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>12,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>General and administrative</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>15,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>8,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>46,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>25,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0in 0in 3.0pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Total stock-based compensation expense</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$30,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$20,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$93,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$64,000</p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <!--egx--> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" style='line-height:115%;margin-left:26.2pt;border-collapse:collapse'> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Three Months Ended</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Nine Months Ended</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Numerator:</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0in 0in 3.0pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Net income (loss)</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$87,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$(90,000)</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$173,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$1,328,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Denominator:</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Basic weighted average shares outstanding</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>45,227,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>45,227,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>45,227,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>45,499,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Effect of dilutive securities:</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Stock options</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>693,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>-</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>672,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>625,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0in 0in 3.0pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Diluted weighted average shares outstanding</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>45,920,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>45,227,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>45,899,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>46,124,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>&nbsp; </p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Net income (loss) per share</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Basic</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>$0.03</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>Diluted</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$0.00</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$0.03</p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <!--egx--> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> <table border="0" cellspacing="0" cellpadding="0" style='line-height:115%;margin-left:26.2pt;border-collapse:collapse'> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Three Months Ended</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>Nine Months Ended</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> <td width="226" colspan="2" valign="bottom" style='width:135.6pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>September 30,</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp; </p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2014</b></p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;padding:0'> <p align="center" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:center;line-height:normal;text-autospace:none'><b>2013</b></p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>New software licenses</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$144,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$51,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$337,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$141,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Software license updates and product support</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>33,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>34,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>90,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>84,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;&nbsp;&nbsp;Total software revenues</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>177,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>85,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>427,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>225,000</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:white;padding:0in 0in 1.5pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:white;text-autospace:none'>Professional services</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>-</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>-</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>13,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:solid black 1.0pt;background:white;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:white;text-autospace:none'>-</p> </td> </tr> <tr align="left"> <td width="333" valign="bottom" style='width:199.65pt;background:#CCEEFF;padding:0in 0in 3.0pt 0in'> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;background:#CCEEFF;text-autospace:none'>&nbsp;&nbsp;&nbsp;Total revenues</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$177,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$85,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$440,000</p> </td> <td width="113" valign="bottom" style='width:67.8pt;border:none;border-bottom:double black 2.25pt;background:#CCEEFF;padding:0'> <p align="right" style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;text-align:right;line-height:normal;background:#CCEEFF;text-autospace:none'>$225,000</p> </td> </tr> </table> <p style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;line-height:115%;margin-bottom:0in;margin-bottom:.0001pt;line-height:normal;text-autospace:none'>&nbsp;</p> 5000 5000 17000 18000 5000 3000 15000 9000 5000 4000 15000 12000 15000 8000 46000 25000 30000 20000 93000 64000 282500 0.13 195000 P2Y4D 87000 -90000 45227000 45227000 45227000 45499000 693000 0 672000 625000 45920000 45227000 45899000 46124000 0.00 0.00 0.00 0.03 0.00 0.00 0.00 0.03 4342000 3422000 2011-09-27 2014-09-24 1000000 prime rate 0.7500 The line of credit is collateralized by substantially all operating assets of the Company. Interest payments are payable on the first day of each month with all principal advances payable on the maturity date of the line of credit. The line of credit agreement also contains numerous negative and affirmative covenants including, among others, restricting certain actions by the Company without the Bank&#146;s consent, such as are typically included in similar loan agreements, including restrictions on the payment of dividends, restrictions on incurring additional debt, prohibitions restricting major corporation transactions, including a sale of the business, and a requirement that the Company retain certain key employees. 0 185000 185000 144000 51000 337000 141000 33000 34000 90000 84000 177000 85000 427000 225000 0 0 13000 0 177000 85000 440000 225000 88000 22000 17105000 1210000 128000 0.0001 173000 1328000 28000 50000 10000 93000 64000 2000 128000 -1424000 -73000 -139000 -20000 -10000 12000 51000 19000 157000 -150000 32000 5000 753000 39000 14000 2000 25000 22000 -25000 -6000 47000 728000 -14000 887000 1027000 1615000 1013000 1000 -7000 23000 0000786620 2014-10-24 0000786620 2014-01-01 2014-09-30 0000786620 2014-09-30 0000786620 2013-12-31 0000786620 2014-07-01 2014-09-30 0000786620 2013-07-01 2013-09-30 0000786620 2013-01-01 2013-09-30 0000786620 2012-12-31 0000786620 2013-09-30 0000786620 us-gaap:CostOfSalesMember 2014-01-01 2014-09-30 0000786620 us-gaap:CostOfSalesMember 2014-07-01 2014-09-30 0000786620 us-gaap:CostOfSalesMember 2013-07-01 2013-09-30 0000786620 us-gaap:CostOfSalesMember 2013-01-01 2013-09-30 0000786620 us-gaap:SellingAndMarketingExpenseMember 2014-01-01 2014-09-30 0000786620 us-gaap:SellingAndMarketingExpenseMember 2014-07-01 2014-09-30 0000786620 us-gaap:SellingAndMarketingExpenseMember 2013-07-01 2013-09-30 0000786620 us-gaap:SellingAndMarketingExpenseMember 2013-01-01 2013-09-30 0000786620 us-gaap:ResearchAndDevelopmentExpenseMember 2014-01-01 2014-09-30 0000786620 us-gaap:ResearchAndDevelopmentExpenseMember 2014-07-01 2014-09-30 0000786620 us-gaap:ResearchAndDevelopmentExpenseMember 2013-07-01 2013-09-30 0000786620 us-gaap:ResearchAndDevelopmentExpenseMember 2013-01-01 2013-09-30 0000786620 us-gaap:GeneralAndAdministrativeExpenseMember 2014-01-01 2014-09-30 0000786620 us-gaap:GeneralAndAdministrativeExpenseMember 2014-07-01 2014-09-30 0000786620 us-gaap:GeneralAndAdministrativeExpenseMember 2013-07-01 2013-09-30 0000786620 us-gaap:GeneralAndAdministrativeExpenseMember 2013-01-01 2013-09-30 0000786620 us-gaap:LineOfCreditMember 2014-01-01 2014-09-30 0000786620 us-gaap:RestrictedStockUnitsRSUMember 2014-01-01 2014-09-30 0000786620 us-gaap:RestrictedStockUnitsRSUMember 2013-01-01 2013-12-31 0000786620 us-gaap:InvestorMember 2014-01-01 2014-09-30 0000786620 us-gaap:InvestorMember 2014-07-01 2014-09-30 0000786620 us-gaap:InvestorMember 2013-07-01 2013-09-30 0000786620 us-gaap:InvestorMember 2013-01-01 2013-09-30 0000786620 us-gaap:InvestorMember 2014-09-30 0000786620 us-gaap:InvestorMember 2013-12-31 0000786620 us-gaap:SubsequentEventMember 2014-10-01 pure iso4217:USD shares iso4217:USD shares