10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2013

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

For the Transition Period From

Commission File Number:  0-16454

CIMETRIX INCORPORATED

Exact name of registrant as specified in its charter)

Nevada	87-0439107
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

6979 South High Tech Drive, Salt Lake City, Utah	84047-3757
(Address of principal executive office)	(Zip Code)

Registrant's telephone number, including area code:  (801) 256-6500

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ý No o

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-3 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	ý
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o   No ý

The number of shares outstanding of the registrant's common stock as of November 1, 2013:

Common stock, par value $.0001 - 45,042,006 shares

CIMETRIX INCORPORATED

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2013

INDEX

PART I Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
PART II Other Information
Item 1.	Legal Proceedings	17
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3.	Defaults Upon Senior Securities	17
Item 5.	Other Information	17
Item 6.	Exhibits	18
Signatures		19

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CIMETRIX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
	September 30, 2013			December 31,
ASSETS	(Unaudited)			2012
Current assets:
Cash	$	1,013,000		$	1,027,000
Accounts receivable, net		503,000			642,000
Inventories		6,000			16,000
Prepaid expenses and other current assets		88,000			102,000
Deferred tax asset - current portion		136,000			-
Total current assets		1,746,000			1,787,000
Property and equipment, net		54,000			81,000
Goodwill		64,000			64,000
Deferred tax asset - long-term portion		1,288,000			-
Other assets		6,000			20,000
Total assets	$	3,158,000		$	1,952,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	54,000		$	49,000
Accrued expenses		81,000			230,000
Deferred revenue		343,000			338,000
Total current liabilities		478,000			617,000
Total liabilities		478,000			617,000
Commitments and contingencies
Stockholders’ equity:
Common stock; $.0001 par value, 100,000,000 shares
authorized, 45,042,006 and 45,567,006 shares issued,
respectively		4,000			4,000
Additional paid-in capital		33,747,000			33,683,000
Treasury stock, 25,000 shares at cost		(49,000	)		(49,000	)
Accumulated deficit		(31,022,000	)		(32,303,000	)
Total stockholders’ equity		2,680,000			1,335,000
Total liabilities and stockholders' equity	$	3,158,000		$	1,952,000

See accompanying notes to consolidated financial statements

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CIMETRIX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2013			2012		2013			2012
Revenues:
New software licenses	$	810,000		$	890,000	$	2,887,000		$	2,964,000
Software license updates and product support		224,000			278,000		729,000			736,000
Total software revenues		1,034,000			1,168,000		3,616,000			3,700,000
Professional services		55,000			146,000		190,000			619,000
Total revenues		1,089,000			1,314,000		3,806,000			4,319,000
Operating costs and expenses:
Cost of revenues		495,000			504,000		1,636,000			1,817,000
Sales and marketing		211,000			226,000		709,000			736,000
Research and development		268,000			296,000		665,000			746,000
General and administrative		251,000			268,000		858,000			919,000
Depreciation and amortization		16,000			17,000		50,000			48,000
Total operating costs and expenses		1,241,000			1,311,000		3,918,000			4,266,000
Income (loss) from operations		(152,000	)		3,000		(112,000	)		53,000
Other income (expenses):
Interest income		-			1,000		1,000			1,000
Gain on sale of property and equipment		2,000			-		2,000			-
Interest expense		-			-		-			-
Other income		1,000			-		8,000			-
Total other income (expenses), net		3,000			1,000		11,000			1,000
Income (loss) before income taxes		(149,000	)		4,000		(101,000	)		54,000
Provision for income taxes (benefit)		(59,000	)		-		(1,429,000	)		6,000
Net income (loss)	$	(90,000	)	$	4,000	$	1,328,000		$	48,000
Net income (loss) per common share:
Basic	$	(0.00	)	$	0.00	$	0.03		$	0.00
Diluted	$	(0.00	)	$	0.00	$	0.03		$	0.00

Weighted average number of shares
outstanding:
Basic	45,227,000	45,727,000	45,499,000	45,716,000
Diluted	45,227,000	46,458,000	46,124,000	46,418,000

See accompanying notes to consolidated financial statements

4

CIMETRIX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Nine Months Ended
	September 30,
	2013			2012
Cash flows from operating activities:
Net income	$	1,328,000		$	48,000
Adjustments to reconcile net income to net
cash (used in) from operating activities:
Depreciation and amortization		50,000			48,000
Stock-based compensation		64,000			62,000
Gain on sale of property and equipment		(2,000	)		-
Changes in operating assets and liabilities
Accounts receivable		139,000			392,000
Inventories		10,000			-
Prepaid expenses and other current assets		-			(7,000	)
Deferred taxes		(1,424,000	)		-
Accounts payable		19,000			(174,000	)
Accrued expenses		(150,000	)		(292,000	)
Deferred revenue		5,000			195,000
Net cash from operating activities		39,000			272,000
Cash flows from investing activities:
Proceeds received from deposits		14,000			-
Proceeds from sale of property and equipment		2,000
Purchase of property and equipment		(22,000	)		(24,000	)
Net cash used in investing activities		(6,000	)		(24,000	)
Cash flows from financing activities:
Payments for repurchase of common stock		(47,000	)		-
Net cash used in financing activities		(47,000	)		-
Net increase (decrease) in cash		(14,000	)		248,000
Cash, beginning of period		1,027,000			871,000
Cash, end of period	$	1,013,000		$	1,119,000
Supplemental Cash Flow Information
	Nine Months Ended
	September 30,
		2013			2012
Cash paid for interest	$	-		$	-
Cash paid (refunded) for income taxes	$	(7,000	)	$	2,000

See accompanying notes to consolidated financial statements

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CIMETRIX INCORPORATED AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization – 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’s smart, connected factories. The Company’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.

Basis of Presentation – The condensed consolidated financial statements include the accounts of the Company 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, 2013 and for the three and nine month periods ended September 30, 2013 and 2012 is unaudited, and the balance sheet as of December 31, 2012 is derived from audited financial statements. The accompanying condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles 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. generally accepted accounting principles. 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, 2012. 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, 2013 are not necessarily indicative of the results that can be expected for the entire year ending December 31, 2013. 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, 2012.

NOTE 2 – STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) Topic 718. 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.

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:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Cost of revenues	$	5,000	$	6,000	$	18,000	$	19,000
Sales and marketing		3,000		2,000		9,000		6,000
Research and development		4,000		3,000		12,000		8,000
General and administrative		8,000		7,000		25,000		29,000
Total stock-based compensation expense	$	20,000	$	18,000	$	64,000	$	62,000
Impact on basic income per common share	$	0.00	$	0.00	$	0.00	$	0.00
Impact on diluted income per common share	$	0.00	$	0.00	$	0.00	$	0.00

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During the nine months ended September 30, 2013, options to purchase 150,000 shares of the Company’s common stock were granted to the Company’s employees and directors, with an exercise price of $0.13 per share.

The total stock-based compensation costs from vesting restricted stock shares in the nine month periods of September 30, 2013 and 2012 was $0 and $13,000, respectively.

As of September 30, 2013, the total unrecognized compensation cost related to non-vested stock-based awards was $153,000. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.10 years.

NOTE 3 – EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding, including unissued awards of restricted stock, which are deemed to be participating securities, during the period. Diluted earnings per common share is computed by dividing the net income (loss) 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.

The following table sets forth the computation of basic and diluted earnings per common share:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2013			2012		2013		2012
Numerator:
Net (loss) income	$	(90,000	)	$	4,000	$	1,328,000	$	48,000
Denominator:
Basic weighted average shares outstanding		45,227,000			45,727,000		45,499,000		45,716,000
Effect of dilutive securities:
Stock options		-			731,000		625,000		702,000
Diluted weighted average shares outstanding		45,227,000			46,458,000		46,124,000		46,418,000
Net income (loss) per share
Basic	$	(0.00	)	$	0.00	$	0.03	$	0.00
Diluted	$	(0.00	)	$	0.00	$	0.03	$	0.00

Potentially dilutive securities representing approximately 2,203,000 and 3,031,000 shares of common stock at September 30, 2013 and 2012, respectively, were excluded from the computation of diluted earnings per common share because their effect would have been anti-dilutive.

NOTE 4 – DEBT

Revolving Bank Line of Credit - The Company and Silicon Valley Bank (the “Bank”) entered into a Loan and Security Agreement (“Agreement”), 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. Line of credit advances are available to the Company in accordance with a defined “Availability Amount”, based in part on qualifying accounts receivable, up to a maximum of $1 million. The line of credit bears interest at the

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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. As of September 30, 2013, the Company had no borrowings against the line of credit.

Under the line of credit agreement, the Company is required to comply with the following financial covenants:

· Maintain a ratio of quick assets to current liabilities minus deferred revenue of at least: 1.50 to 1.00

· Maintain a tangible net worth equal to or greater than the sum of (i) $2,000,000, plus (ii) for each successive quarter, commencing as of the quarter ending December 31, 2013, 50% of net proceeds received by Company in the preceding quarter from bona-fide issuances of new equity or bridge financing which constitutes “subordinated debt” and 50% of net income.

The line of credit agreement also contains numerous negative covenants restricting certain actions by the Company without the Bank’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.

At September 30, 2013, the Company was in compliance with all covenants.

NOTE 5 – COMMON STOCK

The Company had 185,000 vested restricted stock awards for which shares of common stock have not been issued as of September 30, 2013 and December 31, 2012.

On June 6, 2013, and March 28, 2013, the Company entered into transactions with two of its shareholders to redeem 425,000 and 100,000 shares of stock, respectively, for a total of $47,000 which is included as a reduction in accumulated deficit, at cost. The 525,000 shares redeemed were retired.

NOTE 6 – RELATED PARTY TRANSACTIONS

During the three and nine months ended September 30, 2013 and 2012, the Company had the following revenues from one customer that was also a shareholder of the Company:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
New software licenses	$	51,000	$	117,000	$	141,000	$	210,000
Software license updates and product support		34,000		51,000		84,000		103,000
Total software revenues	$	85,000	$	168,000	$	225,000	$	313,000

The Company had accounts receivable from one customer that was also a shareholder totaling $87,000 and $22,000 at September 30, 2013 and December 31, 2012, respectively.

NOTE 7 – INCOME TAXES

The Company’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

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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.

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’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’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.

As of December 31, 2012, the Company had a net operating loss carry forward of approximately $16,695,000, 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’s ownership. Based on the foregoing, at December 31, 2012, the valuation of the Company’s deferred tax asset was $7,686,000 and due to the Company’s historical lack of earnings, the Company did not include any of this deferred tax asset on its December 31, 2012 Condensed Consolidated Balance Sheets.

Subsequently, the Company evaluated its historic and estimated future net income and calculated a valuation allowance at June 30, 2013 of $6,320,000. The change in the valuation allowance of $1,366,000 was reported as a component of the provision for income taxes (benefit) in the accompanying Condensed Consolidated Statements of Operations and as a deferred tax asset on the Condensed Consolidated Balance Sheets.

As of September 30, 2013, the value of the deferred tax asset was $1,424,000, reflecting an increase of $58,000 for the three months ended September 30, 2013 to reflect the income tax benefit resulting from the net loss of $149,000 of the same period.

NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash, which approximates fair value because of the immediate or short-term maturities of the financial instruments included in this category.

NOTE 9 – SUBSEQUENT EVENTS

Management has evaluated events through the date the condensed consolidated financial statements were filed with the Securities and Exchanges Commission and concluded there were no subsequent events to report in the notes to the financial statements.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The following is a brief discussion and explanation of significant financial data, which is presented to help the reader understand the results of the Company’s financial performance for the three-month and nine-month periods ended September 30, 2013 and September 30, 2012 and the Company’s financial position at September 30, 2013. The information includes discussions of sales, expenses, capital resources and other significant financial items.

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This discussion should be read in conjunction with the Company’s Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. The ensuing discussion and analysis contains both statements of historical fact and forward-looking statements. Forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, generally are identified by the words “expects,” “believes,” “anticipates” or words of similar import. Examples of forward-looking statements include: (a) projections regarding sales, revenue, liquidity, capital expenditures and other financial items; (b) statements of the plans, beliefs and objectives of the Company or its management; (c) statements of future economic performance; and (d) assumptions underlying statements regarding the Company or its business. Forward-looking statements are subject to factors and uncertainties that could cause actual results to differ materially from the forward-looking statements, including, but not limited to, those factors and uncertainties described below under “Liquidity and Capital Resources,” “Factors Affecting Future Results” and “Risk Factors,” and those factors set forth under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Cimetrix is a software engineering company that designs, develops, markets and supports factory connectivity and equipment control products for today’s smart, connected factories. The Company’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.

Revenues are derived from the sales of software and services. Software includes the initial sale of software development kits, the ongoing runtime licenses that equipment suppliers purchase for each machine shipped with Cimetrix software and annual contracts for software license updates and product support. Services include the sale of professional services that provide customers with software solutions typically incorporating Cimetrix software products. While Cimetrix products are installed in equipment in a wide range of industries, the Company has focused on the global semiconductor, photovoltaic (PV) and high-brightness light-emitting diode (HB-LED) industries.

Critical Accounting Policies

The Company prepares its condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles. The Company's condensed consolidated financial statements are based on the application of certain accounting policies, the most significant of which are described in Note 1—Summary of Significant Accounting Policies to the Company’s audited financial statements included in the Company’s 2012 Annual Report filed on Form 10-K. Certain of these policies require numerous estimates and strategic or economic assumptions that may prove inaccurate or be subject to variations and may significantly affect the Company's reported results and financial position for the period or in future periods. Changes in underlying factors, assumptions or estimates in any of these areas could have a material impact on the Company's future financial condition and results of operations.

Operations Review

Revenues

The following table summarizes revenues by category and as a percent of total revenues:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
New software licenses	$	810,000	74%	$	890,000	68%	$	2,887,000	76%	$	2,964,000	69%
Software license updates and product support		224,000	21%		278,000	21%		729,000	19%		736,000	17%
Total software revenues		1,034,000	95%		1,168,000	89%		3,616,000	95%		3,700,000	86%
Professional services		55,000	5%		146,000	11%		190,000	5%		619,000	14%
Total revenues	$	1,089,000	100%	$	1,314,000	100%	$	3,806,000	100%	$	4,319,000	100%

Total revenue decreased by $225,000, or 17%, to $1,089,000 for the three months ended September 30, 2013, compared to total revenue of $1,314,000 for the three months ended September 30,

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2012. For the nine months ended September 30, 2013, total revenue decreased by $513,000 or 12% to $3,806,000 from $4,319,000 for the nine months ended September 30, 2012. The decrease in total revenue for the three month and nine month periods in 2013 compared to 2012 was primarily attributable to the reduction in revenues from professional services resulting from implementing a new services strategy in the second quarter of 2012 as discussed later in this section.

New software license revenue includes the initial sale of software development kits and the ongoing runtime licenses that equipment suppliers purchase for each machine shipped with Cimetrix software. New software license revenue decreased by $80,000, or 9%, to $810,000 for the three months ended September 30, 2013, compared to new software license revenue of $890,000 for the three months ended September 30, 2012. For the nine months ended September 30, 2013, new software license revenues decreased by $77,000, or 3% to $2,887,000 from $2,964,000 for the nine months ended September 30, 2012. The new software licenses revenue has been in alignment with industry analysts’ predictions that the semiconductor equipment industry would be flat-to-slightly down in 2013.

Revenue associated with software license updates and product support decreased to $224,000, or 19% for the three months ended September 30, 2013 as compared to $278,000 for the three months ended September 30, 2012. For the nine months ended September 30, 2013, revenue associated with software license updates and product support were relatively flat, decreasing by $7,000, or 1%, to $729,000 from $736,000 for the nine months ended September 30, 2012. The decrease in revenue from software license updates and product support for the three month period from the prior year period reflects the impact of industry consolidation, delayed support renewals decisions by customers and pricing negotiations in the three months ended September 30, 2013.

Total software revenue includes the initial sale of software development kits, the ongoing runtime licenses and software license updates and product support. Total software revenue decreased 11% to $1,034,000 for the three months ended September 30, 2013, as compared to $1,168,000 for the three months ended September 30, 2012. For the nine months ended September 30, 2013, total software revenue decreased 2% to $3,616,000 as compared to $3,700,000 for the nine months ended September 30, 2012. As stated earlier, total software revenue has been in alignment with industry analysts’ predictions that the semiconductor equipment industry will be flat-to-slightly down in 2013.

Professional services revenue was down by 62% to $55,000 for the three months ended September 30, 2013, as compared to $146,000 for the three months ended September 30, 2012. For the nine months ended September 30, 2013, professional services revenue decreased 69% to $190,000 as compared to $619,000 for the nine months ended September 30, 2012. The decrease in services revenue year-over-year resulted from implementing a revised Cimetrix services strategy starting in the second quarter of 2012. The new strategy focuses Cimetrix services on training and coaching our OEM customers in the use of Cimetrix products, instead of implementing turnkey solutions. To support this new services strategy, Cimetrix established a global network of service providers trained in Cimetrix products that are able to provide services to assist customers with software development activities. While this strategy reduces Cimetrix professional services revenue, it enables us to focus on sustaining and enhancing current product lines, as well as R&D for new products that should fuel long term growth.

Results of Operations

The following table sets forth the percentage of costs and expenses to total revenues derived from the Company's Condensed Consolidated Statements of Operations:

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	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Total Revenues		100%		100%		100%		100%
Operating costs and expense:
Cost of revenues		45		38		43		42
Sales and marketing		19		17		19		17
Research and development		25		23		17		17
General and administrative		23		21		23		21
Depreciation and amortization		1		1		1		1
Total operating costs and expenses		113		100		103		98
Income (loss) from operations		(13)		-		(3)		2
Other income (expenses), net		-		-		-		-
Total other income (expenses), net		-		-		-		-
Income (loss) before income taxes		(13		0		(3)		2
Provision for income taxes (benefit)		(5		-		(38)		-
Net income (loss)		(8)		-		35%		2%

For the three months ended September 30, 2013, the Company reported a net loss of $149,000 before income taxes as compared to net income before taxes of $4,000 for the three months ended September 30, 2012. For the nine months ended September 30, 2013, the Company reported a net loss of $101,000 before income taxes as compared to net income before taxes of $54,000 for the nine months ended September 30, 2012. While the Company was successful in lowering expenses for the three and nine month periods in 2013 as compared to the same periods in 2012, the decrease in revenues, as discussed earlier, prevented the Company from maintaining consistent profitability from the prior 16 quarters of profitability.

In June, 2013, the Company recorded a deferred tax benefit totaling $1,366,000. The value of the deferred tax asset is based on the expiration dates of the Company’s net operating loss carry forward amounts and historic and estimated future net income and is subject to ongoing review and, potentially, future changes.  Accounting guidance requires this amount to also be reflected on the income statement at the same time as the asset is recorded on the balance sheet. The $1,366,000 was included in the Company’s net income for the nine months ended September 30, 2013. The Company anticipates that this was a one-time event and does not reflect ongoing earnings expectations from the Company.

As of September 30, 2013, the value of the deferred tax asset was $1,424,000, reflecting an increase of $58,000 for the three months ended September 30, 2013 to reflect the income tax benefit resulting from the net loss of $149,000 of the same period.

The net results for all periods include non-cash stock-based compensation expense and non-cash depreciation and amortization expense. For the three-month periods ended September 30, 2013 and September 30, 2012, stock-based compensation expense was $20,000 and $18,000, respectively, and depreciation and amortization expense was $16,000 and $17,000, respectively. For the nine-month periods ended September 30, 2013 and September 30, 2012, the stock-based compensation expense was $64,000 and $62,000, respectively and depreciation and amortization expense was $50,000 and $48,000 respectively.

Net cash generated by operating activities for the nine months ended September 30, 2013 was $39,000 compared to $272,000 for the nine months ended September 30, 2012. The decrease in the net cash from operating activities for the nine months ended September 30, 2013 compared to the same period in 2012 is attributable primarily to the net loss for the three month period ended September 30, 2013, offset by changes in deferred revenue, accounts receivable and accrued expenses. In the second quarter of 2012, the Company received a payment from a customer representing five years of prepaid product support. In the first quarter of 2013, the Company extended payment terms to a single customer for which the customer continues to make

12

timely payments on those extended terms.

Cost of Revenues

The Company's cost of revenue for the three months ended September 30, 2013 decreased by $9,000, or 2% to $495,000 from $504,000 for three months ended September 30, 2012. For the nine-month periods ended September 30, 2013 and September 30, 2012, the Company’s cost of revenues decreased by $181,000, or 10% to $1,636,000 from $1,817,000. This decrease primarily resulted from the reduction of the use of service partners to augment our engineering team starting in the second quarter of 2012. Cost of revenues as a percentage of total revenues will vary from period to period depending on the mix of software and professional service revenues, the type of service projects completed, the pricing strategy for the projects, the extent of utilization of outside resources, and other factors.

Sales and Marketing

Sales and marketing expenses decreased $15,000, or 7%, to $211,000 during the three months ended September 30, 2013, from $226,000 during the three months ended September 30, 2012. During the nine months ended September 30, 2013, sales and marketing expenses decreased $27,000 or 4% to $709,000 from $736,000. The decrease was primarily a result of reduced commissions on lower revenues. Sales and marketing expenses reflect the direct payroll and related travel expenses of the Company’s sales and marketing staff, the development of product brochures and marketing materials, costs associated with press releases, branding, search engine optimization, website design improvements and costs related to the Company’s representation at industry trade shows.

Research and Development

Research and development expenses decreased $28,000 or 9%, to $268,000 during the three months ended September 30, 2013, from $296,000 during the three months ended September 30, 2012. During the nine months ended September 30, 2013, research and development expenses decreased $81,000 or 11% to $665,000 from $746,000 for the nine months ended September 30, 2012. The decrease was primarily due to the reduction of use of service partners to augment our engineering team in 2012 which resulted in lower costs. Research and development expenses include only direct costs for wages, benefits, materials, and education of technical personnel involved in new product development activities. All indirect costs such as rents, utilities, depreciation and amortization are included in general and administrative expenses, as discussed below.

General and Administrative

General and administrative expenses decreased $17,000 or 6%, to $251,000 in the three months ended September 30, 2013, from $268,000 in the three months ended September 30, 2012. During the nine months ended September 30, 2013, general and administrative expenses decreased $61,000 or 7% to $858,000 from $919,000 for the nine months ended September 30, 2012. The decrease was primarily due to lower net income and related profit sharing costs as well as reduced rent costs as a result of renegotiating lease terms in the fourth quarter of 2012. General and administrative expenses include all direct costs for administrative and accounting personnel, and all rents and utilities for maintaining Company offices.

Depreciation and Amortization

Depreciation and amortization expense decreased $1,000 or 6% to $16,000 in the three months ended September 30, 2013, from $17,000 in the three months ended September 30, 2012. During the nine months ended September 30, 2013, depreciation and amortization increased $2,000 or 4% to $50,000

13

from $48,000 in the nine months ended September 30, 2012. The increase is a result the Company’s investment in equipment upgrades and new financial software.

Other Income (Expense)

The Company did not have any interest expense for the three and nine month periods of September 30, 2013 and 2012.

Interest income for the three months ended September 30, 2013 was $0 compared to $1,000 for the same period in 2012. During the nine months ended September 30, 2013 and 2012, interest income was $1,000.

Gain on sale of property and equipment for the three and nine months ended September 30, 2013 was $2,000 compared to $0 for the same periods in 2012. The gain resulted in a return of a defective piece of equipment in which the seller refunded full price on the equipment.

Other income for the three months ended September 30, 2013 was $1,000 compared to $0 for the three months ended September 30, 2012. During the nine months ended September 30, 2013, other income was $8,000 compared to $0 for the same period in 2012. This other income was from our Japan subsidiary, Cimetrix Japan K.K., due to a Japanese tax law whereby companies are exempt from turning over collected consumption tax to the government if annual revenues to not meet regulatory thresholds.

Liquidity and Capital Resources

At September 30, 2013, the Company had current assets of $1,746,000, including cash of $1,013,000, and current liabilities of $478,000, resulting in a working capital of $1,268,000. Excluding deferred revenue of $343,000, which requires the Company to provide services and support, but does not represent a scheduled obligation requiring the outlay of Company funds, the Company’s current assets exceeded current liabilities by $1,611,000 at September 30, 2013.

Revolving Bank Line of Credit - The Company and Silicon Valley Bank (the “Bank”) entered into a Loan and Security Agreement which expires in September 2014. Line of credit advances are available to the Company in accordance with a defined “Availability Amount”, based in part on qualifying accounts receivable, up to a maximum of $1 million. The terms of this credit facility are summarized in Note 4 to the Condensed Consolidated Financial Statements included in this report.

At September 30, 2013, the Company had no borrowings against the line of credit.

Results of Operations and Cash Flows –As of September 30, 2013, the Company had total stockholders’ equity of $2,680,000, an increase of $1,345,000 from December 31, 2012, of which $1,366,000 is attributable to the initial booking of the Company’s deferred tax asset valuation in June 2013. During the three months ended September 30, 2013, the Company reported a net loss of $149,000 before the provision for income tax benefit of $59,000. The net loss, after the provision for income taxes (benefit), for the three months ended September 30, 2013, was $90,000. During the nine months ended September 30, 2013, the net loss before taxes was $101,000. Net income for the nine months ended September 30, 2013, including the deferred tax benefit adjustment recorded in June 2013 and the provision for income tax benefit, was $1,328,000.

Net cash generated by operating activities for the nine months ended September 30, 2013 was $39,000 compared to $272,000 for the nine months ended September 30, 2012. The decrease in the net cash from operating activities for the nine months ended September 30, 2013 compared to the same period in 2012 is attributable primarily due to the net operating loss for the three month period ended September 30, 2013 offset by changes in deferred revenue, accounts receivable and accrued expenses. In the second quarter of 2012, the Company received a payment from a customer representing five years of prepaid product support. In the

14

first quarter of 2013, the Company extended payment terms to a single customer for a nine-month time period for which the customer continues to make timely payments on those extended terms.

Net cash used in investing activities during the nine months ended September 30, 2013, was $6,000 and consisted of $22,000 for the purchase of hardware and software, less $14,000 in proceeds received from the reduction of a security deposit for the Salt Lake City headquarters facility and proceeds of $2,000 from the sale of property and equipment. Net cash used in investing activities during the nine months ended September 30, 2012, was $24,000 and consisted of hardware and software upgrades.

Net cash used in financing activities for the nine months ended September 30, 2013 was $47,000 compared to $0 for the nine months ended September 30, 2012. This payment of $47,000 represented the use of Company funds to repurchase 525,000 shares of the Company’s common stock from two shareholders.

The Company has not been adversely affected by inflation. Revenues from foreign customers were $1,776,000 during the nine months ended September 30, 2013, representing 47% of the Company’s total revenues, compared to $1,839,000 or 43%, of total revenues during the same period in 2012. The increase in foreign customer sales year-over-year is primarily attributable to new customer design wins for software development kits (SDKs) combined with strong performances from top-tier foreign OEM customers. There are potential economic risks inherent in foreign trade. To minimize the risk from changes in foreign currency exchange rates, the Company’s export sales are primarily transacted in United States dollars.

Factors Affecting Future Results

Total revenue for the first nine months of 2013 decreased 12% compared to the first nine months of 2012, reflecting the net effect of decreased sales as predicted by industry analysts that the semiconductor equipment industry will be flat-to-slightly down in 2013, and decreased revenue from professional services, all as previously discussed in the Operations Review section. Sales of software development kits are difficult for the Company to forecast, as the Company is highly dependent on the timing of the equipment suppliers’ decision to initiate a new machine development program and utilize the Company’s products.

The Company continues to focus on incrementally expanding its customer base and product line in order to increase revenues. In the last two years, the Company invested significant R&D into its CIMControlFramework product for equipment control, which enables the Company to provide equipment makers with a complete software solution that reduces their time-to-market for new equipment developments. As equipment makers reduce costs and internal resources, Cimetrix believes the market for CIMControlFramework will continue to grow as equipment makers invest in new machine development programs.

In mid-October this year, the Company introduced CIMPortal Plus software for equipment manufacturers and integrated device manufacturers (IDMs). CIMPortal Plus, combined with new SEMI standards, provides capability to chip makers to determine when and how much data to collect. CIMPortal Plus makes the equipment data collection much more efficient leading to increased productivity, quality improvements and reduced costs in the fabs. Cimetrix believes the market for CIMPortal Plus will grow as adoption of the new SEMI standards increases.

Ultimately, the Company’s business is driven by the global demand for electronic devices by consumers and businesses. Any changes in the global economic conditions could adversely affect Cimetrix’s business and results of operations.

15

The Company continues to pursue customers through its professional services group, which is now focused on training and coaching our OEM customers in the use of Cimetrix products instead of implementing turnkey solutions. This approach prepares the OEM customer to quickly address changing needs from their customers. We have established a set of integration partners for those customers who do require a turnkey solution. This change in strategy allows us to focus on delivering great products.

The Company’s future operating results and financial condition are difficult to predict and will be affected by a number of factors. The markets for the Company’s products are emerging and specialized. There can be no assurance that the markets for industrial motion control, factory connectivity, and equipment control that are served by the Company will continue to grow, or that the Company’s existing and new products will satisfy the requirements of those markets and achieve a successful level of customer acceptance.

Because of these and other factors, past financial performance is not necessarily indicative of future performance, and historical trends should not be used to anticipate future operating results.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not subject to this requirement since it is not an accelerated filer.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized, and reported within the required time periods and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosure.

As required by Rule 13a-15(b) under the Exchange Act, we conducted an evaluation, under the supervision and with the participation of our management, including the chief executive officer and the chief financial officer, of the effectiveness and the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, the chief executive officer and the chief financial officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

 Changes in internal controls

During the most recent fiscal quarter covered by this report, and since that date there has been no change in the Company’s internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

16

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not currently involved in any pending litigation.

ITEM 1A. RISK FACTORS

The Company has disclosed risk factors in its Annual Report on Form 10-K for the year ended December 31, 2012 which could materially affect its business, financial condition or future results of operations to which the reader is referred. There have been no material changes to the risk factors disclosed in that Form 10-K other than set forth below.

Potential Future Adjustment to Deferred Tax Asset

Based on its then recent history of earnings, the Company recorded a deferred tax asset of $1,366,000 on its June 30, 2013 Condensed Consolidated Balance Sheets. In accordance with accounting guidelines this also resulted in an increase of $1,366,000 in net income for the quarter ended June 30, 2013 and the nine months ended September 30, 2013. The value of this asset is based in part on estimates of future earnings, which are subject to change and which could be adversely affected by the Company’s operating loss for the three and nine months ended September 30, 2013. In the event that these estimates change in the future, the book value of the deferred tax asset may decrease. In such event, the recorded amount on the Condensed Consolidated Balance Sheets would go down and earnings for the associated period would be reduced by the same amount. Any such change would most likely adversely affect the market price for the Company’s stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

ITEM 5. OTHER INFORMATION

None

17

ITEM 6. EXHIBITS

Exhibit No. Description

10.1 Loan and Security Agreement dated September 27, 2011 between Silicon Valley Bank and Cimetrix Incorporated (1)

10.2 First Amendment to Loan and Security Agreement dated September 26, 2012 between Silicon Valley Bank and Cimetrix Incorporated (2)

10.3 Second Amendment to Loan and Security Agreement dated October 1, 2013 between Silicon Valley Bank and Cimetrix Incorporated (3)

31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1	Certification of  Principal Executive Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of  Principal Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
99.1	Press Release dated August 12, 2013*
101

______________________________________

Interactive Data Files*

(1) Included in the Company’s Form 10-Q for the Quarterly Period Ended September 30, 2011

(2) Included in the Company’s Form 10-Q for the Quarterly Period Ended September 30, 2012

(3) Included in the Company’s Form 8-K filed on October 7, 2013

    * Exhibits filed with this report

18

SIGNATURES

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

REGISTRANT

CIMETRIX INCORPORATED

Dated: November 14, 2013

By:	/S/ Robert H. Reback
	Robert H. Reback
	President and Chief Executive Officer
	(Principal Executive Officer)

By:	/S/ Jodi M. Juretich
	Jodi M. Juretich
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

19

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULE 13a - 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert H. Reback, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cimetrix Incorporated for the quarter ended September 30, 2013.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2013

/s/ Robert H. Reback

Robert H. Reback

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULE 13a - 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jodi M. Juretich, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cimetrix Incorporated for the quarter ended September 30, 2013.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 14, 2013

/s/ Jodi M. Juretich

Jodi M. Juretich

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES - OXLEY ACT OF 2002

In connection with the Quarterly Report of Cimetrix, Incorporated (the “Company”) on Form 10-Q for the quarter ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert H. Reback, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2013

/s/ Robert H. Reback

Robert H. Reback

President and Chief Executive Officer

(Principal Executive Officer)

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES - OXLEY ACT OF 2002

In connection with the Quarterly Report of Cimetrix, Incorporated (the “Company”) on Form 10-Q for the quarter ended September 30, 2013, I, Jodi M. Juretich, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2013

/s/ Jodi M. Juretich

Jodi M. Juretich

Chief Financial Officer

(Principal Financial and Accounting Officer)

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.1

EXHIBIT 99.1

Cimetrix Announces Third Quarter 2013 Financial Results

Slow Quarter for Semiconductor Industry Leads to Quarterly Loss

SALT LAKE CITY, UT — November 12, 2013 — Cimetrix Incorporated (OTCQB: CMXX, www.cimetrix.com), a leading provider of factory automation and equipment control software solutions for the global semiconductor, photovoltaic, LED, and other electronics industries, today reported financial results for its third quarter and nine months that ended September 30, 2013 as follows:

Third Quarter 2013 Financial Results

·   Software revenue was $1,034,000, down 11% from Q3 2012 and down 16% from Q2 2013

·   Services revenue was $55,000, down 62% from Q3 2012 and down 35% from Q2 2013

·   Total revenue was $1,089,000, down 17% % from Q3 2012 and down 17% from Q2 2013

·   Net loss was ($90,000)

·   Loss from operations was ($152,000), compared to income of $3,000 in Q3 2012

Nine Month 2013 Financial Results

·   Software revenue was $3,616,000, down 2% from the first nine months of 2012

·   Services revenue was $190,000, down 69% from the first nine months of 2012

·   Total revenue was $3,806,000, down 12% from the first nine months of 2012

·   Net income for the first nine months of 2013 was $1,328,000, which included a one-time benefit of $1,366,000 associated with the recording of the Company's deferred tax asset, compared to $48,000 net income in the first nine months of 2012

·   Loss from operations was ($112,000), compared to income of $53,000 in the first nine months of 2012

Third Quarter 2013 Highlights

·   Connectivity Design Wins at Major OEMs. During the third quarter, the Company received a new design win for SECSConnect™ software from a major disk drive manufacturer, and two wins for CIMConnect™ software.

·   New Cimetrix EDA/Interface A Connectivity Software. The Company delivered the next generation software to develop connectivity that complies with SEMI EDA/Interface A standards. The new product, CIMPortal™ Plus, is based upon the award-winning CIMPortal software, and offers semiconductor equipment manufacturers the features they need to support the latest revisions to the Interface A Standards, while reducing the time and effort required to develop equipment models.

·   New WTWRI (Wait Time Waste Reference Implementation) Application Delivered to SEMATECH. The WTWRI application processes data collected from production equipment and automatically calculates the values of the standard Time Elements. Factory industrial engineers can use this application to quantify active and waiting times for production material, identify areas of waste, and see how to improve equipment throughput and factory cycle time. While this application is initially intended for semiconductor manufacturing, it could be used in many other industries.

Management’s Comments

Commenting about the third quarter, Bob Reback, president and chief executive officer of Cimetrix stated, “At the beginning of 2013, many industry analysts predicted a down year, with an upturn in the semiconductor equipment industry starting in the third quarter. While we were hoping that timing would hold true, we found that many of our customers were experiencing delays in orders from the fabs, and the result was that we did not get the new designs and runtime licenses we forecasted. We operate in a cyclical industry, and that is why we are prepared for periods when there is a lag in the industry.

“On the positive side for this quarter, we completed a major upgrade of CIMPortal, our EDA/Interface A connectivity software. CIMPortal Plus delivers new features and capabilities to give chip makers the capability to determine when and how much data to collect, making equipment data collection much more efficient. The launch of CIMPortal Plus reinforces our leadership in software for Interface A. In addition, we continue to leverage our close collaboration with SEMATECH and leading chip makers as we invest in R&D projects for new product opportunities.”

Fourth Quarter 2013 Outlook

Our customers have reported an increase in machine shipments in the fourth quarter, which has given us a strong start to the quarter, plus we expect to close a number of significant new design wins that slipped out of the third quarter that will lead to healthy SDK revenue. Cimetrix believes we will return to profitability in Q4, and all indications are this up cycle will continue into 2014.

About Cimetrix Incorporated

Cimetrix (OTCQB: CMXX) develops and supports factory automation software products for the global semiconductor, photovoltaic, LED, and other electronics industries. Cimetrix factory connectivity software allows for rapid and reliable implementation of the SEMISECS/GEM, GEM 300, PV2, and EDA standards. Our flexible equipment control framework software is the latest technology that enables equipment suppliers to design and implement their supervisory control, material handling, operator interface, platform and process control, and automation requirements of manufacturing facilities. Cimetrix products can be found in virtually every 300mm semiconductor factory worldwide and include CIMControlFramework™, CIMConnect™, CIM300™, and CIMPortal™ Plus. The added value of Cimetrix passionate Support and Professional Services delivers an outstanding solution for precision equipment companies worldwide.

Cimetrix is an active member in both Semiconductor Equipment and Materials International (SEMI), including the SEMI PV Group, and SEMATECH.

For more information, please visit www.cimetrix.com.

Safe Harbor Statement:

The matters discussed in this news release include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  Statements about the Company’s prospects for future growth and results of operations are forward-looking statements. The comments made by the Company's senior management in regards to future revenue and results are based on current expectations and involve risks and uncertainties that may adversely affect expected results including but not limited to recovery of the economic markets into which the Company sells products, increased capital expenditures by semiconductor chip manufacturers, market acceptance of the Company’s products, the timing and degree of adoption of Interface A by the semiconductor industry, the ability of the Company to control its costs associated with providing products and services, the mix between products and services (which generally have higher associated costs of revenue) provided by the Company, the competitive position of the Company and its products, which include CODE, CIMConnect, CIM300 and CIMPortal product families, the economic climate in the markets in which the Company’s products are sold, technological improvements, and other risks discussed more fully in filings by the Company with the Securities and Exchange Commission.  Many of these factors are beyond the control of the Company.  Reference is made to the Company's most recent filings on Form 10-K and 10-Q, which further detail such risk factors.

###

Company Contact

Rob Schreck

Cimetrix Incorporated

Phone: (801) 256-6500

rob.schreck@cimetrix.com

CIMETRIX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
	September 30, 2013			December 31,
ASSETS	(Unaudited)			2012
Current assets:
Cash	$	1,013,000		$	1,027,000
Accounts receivable, net		503,000			642,000
Inventories		6,000			16,000
Prepaid expenses and other current assets		88,000			102,000
Deferred tax asset - current portion		136,000			-
Total current assets		1,746,000			1,787,000
Property and equipment, net		54,000			81,000
Goodwill		64,000			64,000
Deferred tax asset - long-term portion		1,288,000			-
Other assets		6,000			20,000
Total assets	$	3,158,000		$	1,952,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	54,000		$	49,000
Accrued expenses		81,000			230,000
Deferred revenue		343,000			338,000
Total current liabilities		478,000			617,000
Total liabilities		478,000			617,000
Commitments and contingencies
Stockholders’ equity:
Common stock; $.0001 par value, 100,000,000 shares
authorized, 45,042,006 and 45,567,006 shares issued,
respectively		4,000			4,000
Additional paid-in capital		33,747,000			33,683,000
Treasury stock, 25,000 shares at cost		(49,000	)		(49,000	)
Accumulated deficit		(31,022,000	)		(32,303,000	)
Total stockholders’ equity		2,680,000			1,335,000
Total liabilities and stockholders' equity	$	3,158,000		$	1,952,000

CIMETRIX INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2013			2012		2013			2012
Revenues:
New software licenses	$	810,000		$	890,000	$	2,887,000		$	2,964,000
Software license updates and product support		224,000			278,000		729,000			736,000
Total software revenues		1,034,000			1,168,000		3,616,000			3,700,000
Professional services		55,000			146,000		190,000			619,000
Total revenues		1,089,000			1,314,000		3,806,000			4,319,000
Operating costs and expenses:
Cost of revenues		495,000			504,000		1,636,000			1,817,000
Sales and marketing		211,000			226,000		709,000			736,000
Research and development		268,000			296,000		665,000			746,000
General and administrative		251,000			268,000		858,000			919,000
Depreciation and amortization		16,000			17,000		50,000			48,000
Total operating costs and expenses		1,241,000			1,311,000		3,918,000			4,266,000
Income (loss) from operations		(152,000	)		3,000		(112,000	)		53,000
Other income (expenses):
Interest income		-			1,000		1,000			1,000
Gain on sale of property and equipment		2,000			-		2,000			-
Interest expense		-			-		-			-
Other income		1,000			-		8,000			-
Total other income (expenses), net		3,000			1,000		11,000			1,000
Income (loss) before income taxes		(149,000	)		4,000		(101,000	)		54,000
Provision for income taxes (benefit)		(59,000	)		-		(1,429,000	)		6,000
Net income (loss)	$	(90,000	)	$	4,000	$	1,328,000		$	48,000
Net income (loss) per common share:
Basic	$	(0.00	)	$	0.00	$	0.03		$	0.00
Diluted	$	(0.00	)	$	0.00	$	0.03		$	0.00
Weighted average number of shares
outstanding:
Basic		45,227,000			45,727,000		45,431,000			45,716,000
Diluted		45,227,000			46,458,000		46,056,000			46,418,000

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Note 6 - Related Party Transactions: Schedule of Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2013

Tables/Schedules

Schedule of Related Party Transactions

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
New software licenses	$       51,000	$      117,000	$      141,000	$      210,000
Software license updates and product support	34,000	51,000	84,000	103,000
Total software revenues	$       85,000	$      168,000	$      225,000	$      313,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenues:
New software licenses	$ 810,000	$ 890,000	$ 2,887,000	$ 2,964,000
Software license updates and product support	224,000	278,000	729,000	736,000
Total software revenues	1,034,000	1,168,000	3,616,000	3,700,000
Professional services	55,000	146,000	190,000	619,000
Total revenues	1,089,000	1,314,000	3,806,000	4,319,000
Operating costs and expenses:
Cost of revenues	495,000	504,000	1,636,000	1,817,000
Sales and marketing	211,000	226,000	709,000	736,000
Research and development	268,000	296,000	665,000	746,000
General and administrative	251,000	268,000	858,000	919,000
Depreciation and amortization	16,000	17,000	50,000	48,000
Total operating costs and expenses	1,241,000	1,311,000	3,918,000	4,266,000
Income (loss) from operations	(152,000)	3,000	(112,000)	53,000
Other income (expenses):
Interest income		1,000	1,000	1,000
Gain on sale of property and equipment	2,000		2,000
Interest expense
Other income	1,000		8,000
Total other income (expenses), net	3,000	1,000	11,000	1,000
Income (loss) before income taxes	(149,000)	4,000	(101,000)	54,000
Provision for income taxes (benefit)	(59,000)		(1,429,000)	6,000
Net income (loss)	$ (90,000)	$ 4,000	$ 1,328,000	$ 48,000
Net income (loss) per common share:
Basic	$ 0.00	$ 0.00	$ 0.03	$ 0.00
Diluted	$ 0.00	$ 0.00	$ 0.03	$ 0.00
Weighted average number of shares outstanding: Basic	45,227,000	45,727,000	45,499,000	45,716,000
Weighted average number of shares outstanding: Diluted	45,227,000	46,458,000	46,124,000	46,418,000

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Note 5 - Common Stock

9 Months Ended

Sep. 30, 2013

Notes

Note 5 - Common Stock

NOTE 5 – COMMON STOCK

The Company had 185,000 vested restricted stock awards for which shares of common stock have not been issued as of September 30, 2013 and December 31, 2012.

On June 6, 2013, and March 28, 2013, the Company entered into transactions with two of its shareholders to redeem 425,000 and 100,000 shares of stock, respectively, for a total of $47,000 which is included as a reduction in accumulated deficit, at cost. The 525,000 shares redeemed were retired.

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Note 6 - Related Party Transactions: Schedule of Related Party Transactions (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
New software licenses	$ 810,000	$ 890,000	$ 2,887,000	$ 2,964,000
Software license updates and product support	224,000	278,000	729,000	736,000
Total software revenues	1,034,000	1,168,000	3,616,000	3,700,000
Investor 1
New software licenses	51,000	117,000	141,000	210,000
Software license updates and product support	34,000	51,000	84,000	103,000
Total software revenues	$ 85,000	$ 168,000	$ 225,000	$ 313,000

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Note 2 - Stock-based Compensation: Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Allocated Share-based Compensation Expense	$ 20,000	$ 18,000	$ 64,000	$ 62,000
Basic	$ 0.00	$ 0.00	$ 0.03	$ 0.00
Diluted	$ 0.00	$ 0.00	$ 0.03	$ 0.00
Cost of Sales
Allocated Share-based Compensation Expense	5,000	6,000	18,000	19,000
Selling and Marketing Expense
Allocated Share-based Compensation Expense	3,000	2,000	9,000	6,000
Research and Development Expense
Allocated Share-based Compensation Expense	4,000	3,000	12,000	8,000
General and Administrative Expense
Allocated Share-based Compensation Expense	$ 8,000	$ 7,000	$ 25,000	$ 29,000
Impact on Earnings
Basic	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Diluted	$ 0.00	$ 0.00	$ 0.00	$ 0.00

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Note 7 - Income Taxes (Details) (USD $)	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Jun. 30, 2013	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Details
Operating Loss Carryforwards						$ 16,695,000
Deferred Tax Assets, Gross						7,686,000
Deferred Tax Assets, Valuation Allowance			6,320,000
Valuation Allowance, Deferred Tax Asset, Change in Amount			1,366,000
Value of Deferred Tax Assets	1,424,000			1,424,000
Current Income Tax Expense (Benefit)	58,000
Income (loss) before income taxes	$ (149,000)	$ 4,000		$ (101,000)	$ 54,000

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Note 6 - Related Party Transactions (Details) (Investor 1, USD $)	Sep. 30, 2013	Dec. 31, 2012
Investor 1
Accounts Receivable, Net	$ 87,000	$ 22,000

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Note 1 - Organization and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Notes

Note 1 - Organization and Summary of Significant Accounting Policies

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization – 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’s smart, connected factories. The Company’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.

Basis of Presentation – The condensed consolidated financial statements include the accounts of the Company 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, 2013 and for the three and nine month periods ended September 30, 2013 and 2012 is unaudited, and the balance sheet as of December 31, 2012 is derived from audited financial statements. The accompanying condensed consolidated financial statements have been prepared in accordance with U. S. generally accepted accounting principles 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. generally accepted accounting principles. 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, 2012. 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, 2013 are not necessarily indicative of the results that can be expected for the entire year ending December 31, 2013. 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, 2012.

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Note 3 - Earnings Per Share

9 Months Ended

Sep. 30, 2013

Notes

Note 3 - Earnings Per Share

NOTE 3 – EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding, including unissued awards of restricted stock, which are deemed to be participating securities, during the period. Diluted earnings per common share is computed by dividing the net income (loss) 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.

The following table sets forth the computation of basic and diluted earnings per common share:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
Numerator:
Net (loss) income	$(90,000)	$4,000	$1,328,000	$48,000
Denominator:
Basic weighted average shares outstanding	45,227,000	45,727,000	45,499,000	45,716,000
Effect of dilutive securities:
Stock options	-	731,000	625,000	702,000
Diluted weighted average shares outstanding	45,227,000	46,458,000	46,124,000	46,418,000
Net income (loss) per share
Basic	$(0.00)	$0.00	$0.03	$0.00
Diluted	$(0.00)	$0.00	$0.03	$0.00

Potentially dilutive securities representing approximately 2,203,000 and 3,031,000 shares of common stock at September 30, 2013 and 2012, respectively, were excluded from the computation of diluted earnings per common share because their effect would have been anti-dilutive.

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Note 6 - Related Party Transactions

9 Months Ended

Sep. 30, 2013

Notes

Note 6 - Related Party Transactions

NOTE 6 – RELATED PARTY TRANSACTIONS

During the three and nine months ended September 30, 2013 and 2012, the Company had the following revenues from one customer that was also a shareholder of the Company:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
New software licenses	$       51,000	$      117,000	$      141,000	$      210,000
Software license updates and product support	34,000	51,000	84,000	103,000
Total software revenues	$       85,000	$      168,000	$      225,000	$      313,000

The Company had accounts receivable from one customer that was also a shareholder totaling $87,000 and $22,000 at September 30, 2013 and December 31, 2012, respectively.

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Note 4 - Debt

9 Months Ended

Sep. 30, 2013

Notes

Note 4 - Debt

NOTE 4 – DEBT

Revolving Bank Line of Credit - The Company and Silicon Valley Bank (the “Bank”) entered into a Loan and Security Agreement (“Agreement”), 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. Line of credit advances are available to the Company in accordance with a defined “Availability Amount”, 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. As of September 30, 2013, the Company had no borrowings against the line of credit.

Under the line of credit agreement, the Company is required to comply with the following financial covenants:

·       Maintain a ratio of quick assets to current liabilities minus deferred revenue of at least: 1.50 to 1.00

·       Maintain a tangible net worth equal to or greater than the sum of (i) $2,000,000, plus (ii) for each successive quarter, commencing as of the quarter ending December 31, 2013, 50% of net proceeds received by Company in the preceding quarter from bona-fide issuances of new equity or bridge financing which constitutes “subordinated debt” and 50% of net income.

The line of credit agreement also contains numerous negative covenants restricting certain actions by the Company without the Bank’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.

At September 30, 2013, the Company was in compliance with all covenants.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Statement of Financial Position
Common Stock, par or stated value	$ 0.0001	$ 0.0001
Common Stock, shares authorized	100,000,000	100,000,000
Common Stock, shares issued	45,042,006	45,567,006
Common Stock, shares outstanding	45,042,006	45,567,006
Treasury Stock , Shares	25,000	25,000

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Note 9 - Subsequent Events

9 Months Ended

Sep. 30, 2013

Notes

Note 9 - Subsequent Events

NOTE 9 – SUBSEQUENT EVENTS

            Management has evaluated events through the date the condensed consolidated financial statements were filed with the Securities and Exchanges Commission and concluded there were no subsequent events to report in the notes to the financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net income	$ 1,328,000	$ 48,000
Adjustments to reconcile net income to net cash (used in) from operating activities:
Depreciation and amortization	50,000	48,000
Stock-based compensation	64,000	62,000
Gain on sale of property and equipment	(2,000)
Changes in operating assets and liabilities
Accounts receivable	139,000	392,000
Inventories	10,000
Prepaid expenses and other current assets		(7,000)
Deferred taxes	(1,424,000)
Accounts payable	19,000	(174,000)
Accrued expenses	(150,000)	(292,000)
Deferred revenue	5,000	195,000
Net cash from operating activities	39,000	272,000
Cash flows from investing activities:
Proceeds received from deposits	14,000
Proceeds from sale of property and equipment	2,000
Purchase of property and equipment	(22,000)	(24,000)
Net cash used in investing activities	(6,000)	(24,000)
Cash flows from financing activities:
Payments for repurchase of common stock	(47,000)
Net cash used in financing activities	(47,000)
Net increase (decrease) in cash	(14,000)	248,000
Cash, beginning of period	1,027,000	871,000
Cash, end of period	1,013,000	1,119,000
Supplemental Cash Flow Information
Cash paid for interest
Cash paid (refunded) for income taxes	$ (7,000)	$ 2,000

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current assets:
Cash	$ 1,013,000	$ 1,027,000
Accounts receivable, net	503,000	642,000
Inventories	6,000	16,000
Prepaid expenses and other current assets	88,000	102,000
Deferred tax asset - current portion	136,000
Total current assets	1,746,000	1,787,000
Property and equipment, net	54,000	81,000
Goodwill	64,000	64,000
Deferred tax asset - long-term portion	1,288,000
Other assets	6,000	20,000
Total assets	3,158,000	1,952,000
Current liabilities:
Accounts payable	54,000	49,000
Accrued expenses	81,000	230,000
Deferred revenue	343,000	338,000
Total current liabilities	478,000	617,000
Total liabilities	478,000	617,000
Commitments and contingencies
Stockholders' equity:
Common stock; $.0001 par value, 100,000,000 shares authorized, 45,042,006 and 45,567,006 shares issued, respectively	4,000	4,000
Additional paid-in capital	33,747,000	33,683,000
Treasury stock, 25,000 shares at cost	(49,000)	(49,000)
Accumulated deficit	(31,022,000)	(32,303,000)
Total stockholders' equity	2,680,000	1,335,000
Total Liabilities and stockholders' equity	$ 3,158,000	$ 1,952,000

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Note 5 - Common Stock (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Stock Repurchased and Retired During Period, Shares	525,000
Stock Repurchased and Retired During Period, Value	$ 47,000
Investor 1
Stock Repurchased and Retired During Period, Shares	425,000
Investor 2
Stock Repurchased and Retired During Period, Shares	100,000
Restricted Stock Units (RSUs)
Vested awards for which common stock has not been issued	185,000	185,000

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Note 8 - Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2013

Notes

Note 8 - Fair Value of Financial Instruments

NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash, which approximates fair value because of the immediate or short-term maturities of the financial instruments included in this category.

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Note 3 - Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables)

9 Months Ended

Sep. 30, 2013

Tables/Schedules

Schedule of Earnings Per Share, Basic and Diluted

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
Numerator:
Net (loss) income	$(90,000)	$4,000	$1,328,000	$48,000
Denominator:
Basic weighted average shares outstanding	45,227,000	45,727,000	45,499,000	45,716,000
Effect of dilutive securities:
Stock options	-	731,000	625,000	702,000
Diluted weighted average shares outstanding	45,227,000	46,458,000	46,124,000	46,418,000
Net income (loss) per share
Basic	$(0.00)	$0.00	$0.03	$0.00
Diluted	$(0.00)	$0.00	$0.03	$0.00

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Note 7 - Income Taxes

9 Months Ended

Sep. 30, 2013

Notes

Note 7 - Income Taxes

NOTE 7 – INCOME TAXES

The Company’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.

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’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’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.

As of December 31, 2012, the Company had a net operating loss carry forward of approximately $16,695,000, 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’s ownership. Based on the foregoing, at December 31, 2012, the valuation of the Company’s deferred tax asset was $7,686,000 and due to the Company’s historical lack of earnings, the Company did not include any of this deferred tax asset on its December 31, 2012 Condensed Consolidated Balance Sheets.

Subsequently, the Company evaluated its historic and estimated future net income and calculated a valuation allowance at June 30, 2013 of $6,320,000. The change in the valuation allowance of $1,366,000 was reported as a component of the provision for income taxes (benefit) in the accompanying Condensed Consolidated Statements of Operations and as a deferred tax asset on the Condensed Consolidated Balance Sheets.

As of September 30, 2013, the value of the deferred tax asset was $1,424,000, reflecting an increase of $58,000 for the three months ended September 30, 2013 to reflect the income tax benefit resulting from the net loss of $149,000 of the same period.

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Note 2 - Stock-based Compensation

9 Months Ended

Sep. 30, 2013

Notes

Note 2 - Stock-based Compensation

NOTE 2 – STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation in accordance with Accounting Standards Codification (“ASC”) Topic 718. 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.

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:

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
Cost of revenues	$5,000	$6,000	$18,000	$19,000
Sales and marketing	3,000	2,000	9,000	6,000
Research and development	4,000	3,000	12,000	8,000
General and administrative	8,000	7,000	25,000	29,000
Total stock-based compensation expense	$20,000	$18,000	$64,000	$62,000
Impact on basic income per common share	$0.00	$0.00	$0.00	$0.00
Impact on diluted income per common share	$0.00	$0.00	$0.00	$0.00

During the nine months ended September 30, 2013, options to purchase 150,000 shares of the Company’s common stock were granted to the Company’s employees and directors, with an exercise price of $0.13 per share.

The total stock-based compensation costs from vesting restricted stock shares in the nine month periods of September 30, 2013 and 2012 was $0 and $13,000, respectively.

As of September 30, 2013, the total unrecognized compensation cost related to non-vested stock-based awards was $153,000. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.10 years.

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Note 2 - Stock-based Compensation (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Options, Grants in Period			150,000
Options, Grants in Period, Exercise Price			$ 0.13
Allocated Share-based Compensation Expense	$ 20,000	$ 18,000	$ 64,000	$ 62,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	153,000		153,000
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition			2 years 1 month 6 days
Restricted Stock
Allocated Share-based Compensation Expense			$ 0	$ 13,000

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Note 2 - Stock-based Compensation: Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs (Tables)

9 Months Ended

Sep. 30, 2013

Tables/Schedules

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2013	2012	2013	2012
Cost of revenues	$5,000	$6,000	$18,000	$19,000
Sales and marketing	3,000	2,000	9,000	6,000
Research and development	4,000	3,000	12,000	8,000
General and administrative	8,000	7,000	25,000	29,000
Total stock-based compensation expense	$20,000	$18,000	$64,000	$62,000
Impact on basic income per common share	$0.00	$0.00	$0.00	$0.00
Impact on diluted income per common share	$0.00	$0.00	$0.00	$0.00

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Note 4 - Debt (Details) (USD $)	9 Months Ended
	Sep. 30, 2013
Details
Line of Credit Facility, Initiation Date	Sep. 27, 2011
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000,000
Line of Credit Facility, Interest Rate Description	The line of credit bears interest at the prime rate plus .75%, payable monthly.
Line of Credit Facility, Collateral	The line of credit is collateralized by substantially all operating assets of the Company
Line of Credit Facility, Covenant Terms	Under the line of credit agreement, the Company is required to comply with the following financial covenants: · Maintain a ratio of quick assets to current liabilities minus deferred revenue of at least: 1.50 to 1.00 · Maintain a tangible net worth equal to or greater than the sum of (i) $2,000,000, plus (ii) for each successive quarter, commencing as of the quarter ending December 31, 2013, 50% of net proceeds received by Company in the preceding quarter from bona-fide issuances of new equity or bridge financing which constitutes “subordinated debt” and 50% of net income. The line of credit agreement also contains numerous negative covenants restricting certain actions by the Company without the Bank’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.
Line of Credit Facility, Covenant Compliance	At September 30, 2013, the Company was in compliance with all covenants.

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Note 3 - Earnings Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Numerator:
Net income	$ (90,000)	$ 4,000	$ 1,328,000	$ 48,000
Denominator:
Basic weighted average shares outstanding	45,227,000	45,727,000	45,499,000	45,716,000
Effect of dilutive securities:
Stock Options		$ 731,000	$ 625,000	$ 702,000
Diluted weighted average shares outstanding	45,227,000	46,458,000	46,124,000	46,418,000
Net income (loss) per common share:
Basic	$ 0.00	$ 0.00	$ 0.03	$ 0.00
Diluted	$ 0.00	$ 0.00	$ 0.03	$ 0.00

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 01, 2013
Document and Entity Information
Entity Registrant Name	Cimetrix Incorporated
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Amendment Flag	false
Entity Central Index Key	0000786620
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		45,042,006
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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Note 3 - Earnings Per Share (Details)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Details
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,203,000	3,031,000