10QSB 1 t10qq300.txt FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Quarterly Report Under Section 13 Or 15(d) Of The Securities Exchange Act Of 1934 For the Quarter Ended: September 30, 2000 Commission File No: 0-6933 CAMBEX CORPORATION (Exact name of registrant as specified in its charter) Massachusetts 04-244-2959 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 360 Second Avenue, Waltham, Massachusetts (Address of principal executive offices) 02451 (Zip Code) Registrant's telephone number, including area code: (781) 890-6000 Indicate by "X" whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of share outstanding of each of the issuer's classes of common stock, As of the latest practicable date. Class Outstanding as of September 30, 2000 Common 9,731,635 shares Part I. FINANCIAL INFORMATION Item 1. Financial Statements CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 (UNAUDITED) ASSETS SEPTEMBER 30, DECEMBER 31, 2000 1999 CURRENT ASSETS: CASH AND CASH EQUIVALENTS $ 155,791 $ 366,743 ACCOUNTS RECEIVABLE, Less Reserves of $100,000 in 2000 and 1999 368,231 202,466 INVENTORIES 465,555 622,430 PREPAID EXPENSES 63,298 65,995 TOTAL CURRENT ASSETS $ 1,052,875 $ 1,257,634 PROPERTY AND EQUIPMENT, at cost: MACHINERY AND EQUIPMENT $ 3,052,887 $ 3,052,887 FURNITURE AND FIXTURES 162,625 162,625 LEASEHOLD IMPROVEMENTS 602,092 602,092 $ 3,817,604 $ 3,817,604 LESS - ACCUMULATED DEPRECIATION AND AMORTIZATION 3,700,913 3,639,196 NET PROPERTY AND EQUIPMENT $ 116,691 $ 178,408 OTHER ASSETS OTHER $ 37,830 $ 37,830 TOTAL ASSETS $ 1,207,396 $ 1,473,872 CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 (UNAUDITED) LIABILITIES AND STOCKHOLDERS' INVESTMENT SEPTEMBER 30, DECEMBER 31, 2000 1999 CURRENT LIABILITIES: LOAN AGREEMENT $ 618,087 $ 601,029 NOTES PAYABLE 2,287,940 550,000 ACCOUNTS PAYABLE 517,831 463,675 OBLIGATIONS FOR TRADE-IN MEMORY 240,000 286,250 OTHER LIABILITIES-SHORT TERM PORTION 1,446,214 967,558 ACCRUED EXPENSES 600,906 513,849 TOTAL CURRENT LIABILITIES $ 5,710,978 $ 3,382,361 LONG TERM DEBT $ 1,273,730 $ 1,273,730 OTHER LIABILITIES-LONG TERM PORTION 1,341,709 2,324,540 DEFERRED REVENUE - 100,116 STOCKHOLDERS' INVESTMENT: PREFERRED STOCK, $ 1.00 PAR VALUE PER SHARE AUTHORIZED - 3,000,000 SHARES ISSUED - NONE COMMON STOCK, $ .10 PAR VALUE PER SHARE AUTHORIZED - 25,000,000 SHARES ISSUED -11,269,615 shares in 2000,and 11,076,232 shares in 1999 $ 1,126,962 $ 1,107,623 CAPITAL IN EXCESS OF PAR VALUE 15,984,266 15,970,199 ACCUMULATED OTHER COMPREHENSIVE INCOME 101,989 101,989 RETAINED EARNINGS (DEFICIT) (23,455,272) (21,931,920) LESS - COST OF SHARES HELD IN TREASURY 1,537,980 in 2000 and 1,534,356 in 1999 (876,966) (854,766) TOTAL STOCKHOLDERS' INVESTMENT $ (7,119,021) $ (5,606,875) TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 1,207,396 $ 1,473,872 CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE NINE MONTHS ENDED OCTOBER 2, 1999 AND SEPTEMBER 30, 2000 For The Quarter Ended For The Nine Months Ended September 30, October 2, September 30, October 2, 2000 1999 2000 1999 (unaudited) REVENUES $ 700,905 $ 867,492 $ 1,758,320 $2,870,416 COST OF SALES 330,458 314,282 888,134 1,183,655 Gross profit $ 370,447 $ 553,210 $ 870,186 $1,686,761 OPERATING EXPENSES: Research and development $ 421,149 $ 201,556 $ 1,111,862 $ 837,016 Selling 250,196 216,238 767,893 586,052 General and administrative 116,512 132,315 340,110 433,024 Total operating expenses $ 787,857 $ 550,109 $ 2,219,865 $1,856,092 OPERATING INCOME (LOSS) $ (417,410) $ 3,101 $(1,349,679)$(169,331) OTHER INCOME (EXPENSE): Interest expense (99,000) (45,618) (276,079) (118,648) Interest income - - - 405 Other income (expense) - - - 13,810 INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS $ (516,410) $( 42,517)$(1,625,758)$(273,764) Provision for income taxes - - - - INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS $ (516,410) $( 42,517)$(1,625,758)$(273,764) Extraordinary Items - 255,411 102,406 754,949 NET INCOME (LOSS) $ (516,410) $ 212,894 $(1,523,352)$ 481,185 OTHER COMPREHENSIVE INCOME, NET OF TAX: Foreign Currency translation Adjustments - - - - OTHER COMPREHENSIVE INCOME $ - $ - $ - $ - TOTAL COMPREHENSIVE INCOME (LOSS) $ (516,410) $ 212,894 $(1,523,352)$ 481,185 TOTAL COMPREHENSIVE INCOME (LOSS) PER COMMON SHARE $ (0.05) $ 0.02 $ (0.16)$ 0.05 Weighted Average Common Shares Outstanding 9,730,000 9,540,000 9,660,000 9,540,000 Weighted Average Common and Common Equivalent Shares Outstanding 10,390,000 9,540,000 10,390,000 9,540,000 CAMBEX CORPORATION AND SUBSIDIARIES (UNAUDITED) CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND OCTOBER 2, 1999 For The Nine Months Ended September 30, 2000 October 2, 1999 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ (1,523,352)$ 481,185 Adjustments to reconcile net income(loss) to net cash provided by (used in) operating activities: Depreciation $ 61,717 $ 98,676 Amortization of prepaid expenses 7,210 7,822 Common stock/warrants issued in lieu of cash 10,246 - Change in assets and liabilities: Decrease (increase) in accounts receivable (165,765) 255,276 Decrease (increase) in inventory 156,875 (335,379) Decrease (increase) in investment in sales-type leases - 25,820 Decrease (increase) in prepaid expenses (4,513) 11,636 Decrease in other assets - - Increase (decrease) in accounts payable 54,156 (34,262) Increase (decrease) in obligations for trade-in memory(46,250) - Increase (decrease) in accrued expenses 87,057 135,642 Increase (decrease) in deferred revenue (100,116) (154,000) Increase (decrease) in other liabilities (504,175) (960,646) Total adjustments $ (443,558)$ (949,415) Net cash provided by(used in) operating activities$ (1,966,910)$ (468,230) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of equipment, net $ - $ (8,688) Net cash provided by(used in) investing activities$ - $ (8,688) CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in notes payable $ 1,737,940 $ 210,000 Proceeds from sale of common stock and warrants 960 270 Net borrowings (repayments) under loan agreement 17,058 159,272 Net cash provided by (used in) financing activities $ 1,755,958 $ 369,542 Effect of exchange rate changes on cash - - Net increase (decrease) in cash and cash equivalents $ (210,952) $ (107,376) Cash and cash equivalents at beginning of year 366,743 211,452 Cash and cash equivalents at end of period $ 155,791 $ 104,076 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 11,618 $ 10,648 Income Taxes - - CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT Common Stock Capital in Accumulated Retained Cost of $.10 Excess of Other Comprehensive Earnings Shares Held Par Value Par Value Income (Deficit) in Treasury BALANCE AT JANUARY 1, 1999 $ 1,107,258 $15,966,625 $ 88,134 $(22,028,044)$ (854,766) ADD: Net income $ - $ - $ - $ 481,185 $ - Exercise of employee stock options 225 45 - - - Issuance of warrants - 1000 - - - BALANCE AT OCTOBER 2, 1999 $ 1,107,483 $15,967,670 $ 88,134 $(21,546,859)$ (854,766) BALANCE AT JANUARY 1, 2000 $ 1,107,623 $15,970,199 $101,989 $(21,931,920)$ (854,766) ADD: Net income(loss) $ - $ - $ - $ (1,523,352)$ - Exercise of employee stock options 800 160 - - - Stock Purchase Plan Shares 8,539 1,707 - - - Exercise of warrants 10,000 12,200 - - (22,200) BALANCE AT SEPTEMBER 30, 2000 $ 1,126,962$15,984,266 $101,989 $(23,455,272)$(876,966) FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File No: 0-6933 Notes & Comments: (1)Significant Accounting Policies The accompanying consolidated financial statements include our accounts and our wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The condensed financial statements included herein have been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to make the information presented not misleading. The information furnished includes all adjustments and accruals consisting only of normal recurring accrual adjustments which are, in our opinion, necessary for a fair presentation of results for the interim period. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in our latest annual report on Form 10-K. Inventories, which include raw materials, labor and manufacturing overhead are stated at the lower of cost (first-in, first-out) or market and consist of the following: September 30, December 31, 2000 1999 Raw materials $ 245,016 $ 419,984 Work-in-process 79,088 78,572 Finished goods 141,451 123,874 $ 465,555 $ 622,430 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Notes & Comments (Continued): (2) Income and Dividends Per Share Per share amounts are based on the weighted average number of shares outstanding during each year plus applicable common stock equivalents. There were no material differences for per share amounts assuming full dilution in either year. FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The statements contained in "Management Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere throughout this Report on Form 10-QSB that are not historical facts are "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. These forward-looking statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those reflected in the forward-looking statements. These forward-looking statements reflect management's analysis, judgment, belief or expectation only as of the date hereof. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof or to publicly release the results of revisions to such forward-looking statements that may be made to reflect events or circumstances after the date hereof. In addition to the disclosure contained herein, readers should carefully review any disclosure of risks and uncertainties contained in our registration statement filed on Form SB-2, File Number 333-43294, and other documents we file or have filed from time to time with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. We develop, manufacture and market leading-edge Fibre Channel hardware and software solutions for building Storage Area Networks (SANs). We offer high performance Fibre Channel host bus adapters and hubs, high availability software, Full-Fibre RAID arrays and management software for the deployment of heterogeneous SAN solutions, providing companies the competitive advantage of constant data access, storage consolidation and centralized management. We also supply memory for IBM enterprise servers. FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Comparison of the quarter ended September 30, 2000 and the quarter ended October 2, 1999 Our revenues were $701,000 for the quarter ended September 30, 2000 and $867,000 for the quarter ended October 2, 1999. Revenues for the three months ended September 30, 2000 decreased 19% compared to revenues for the same three months in the prior year due to decreased disk array product sales and related service revenues, which was partially offset by growth in sales of our fibre channel connectivity products. The decrease in revenues from sales of our disk array products and related services was partly due to transitioning our line of storage products from traditional SCSI-based disk arrays to full Fibre Channel disk arrays. We also experience large fluctuations in quarter to quarter revenues because our revenue base is small and revenue from a disk array sale to a single customer is usually large, with a long sales cycle. Therefore, a delay of any given disk array sale from one quarter to the next quarter can have a significant impact on revenues from quarter to quarter. Gross profit rate was 53% of sales for the three months ended September 30, 2000, compared to 64% of sales for the three months ended October 2, 1999. This decrease in our gross profit rate was the result of the greater relative amount of fixed manufacturing costs in relation to revenues in the third quarter of this year as compared to the third quarter of fiscal 1999. Operating expenses for the three months ended September 30, 2000 increased by 43% in comparison to operating expenses for the comparable three months of the prior year. Research and development expenses for the three months ended September 30, 2000 increased by 109% compared to the amount of these expenses in the third quarter of fiscal 1999. In order to remain competitive, we continue to expend significant amounts for research and development for new products and the enhancement of products. Selling expenses for the three months ended September 30, 2000 increased by 16% compared to the amount of these expenses in the third quarter of fiscal 1999. We continued to expend increased resources to build our sales and marketing organization and reseller channels. FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Interest expense increased by 117% for the three months ended September 30, 2000 compared to the three months ended October 2, 1999. This increase in interest expense was primarily due to funds borrowed following the end of the third quarter of 1999. We borrowed $550,000 in November 1999 in exchange for, among other things, our issuance of 12% promissory notes due November 2000. We also borrowed $2,000,000 in January and February 2000 through the issuance of bridge financing notes that accrued interest at the rate of 8% per annum until maturity in August and September. These notes currently accrue interest at the rate of 12% per annum. Extraordinary income items for the third quarter of fiscal 1999 were recorded as a result of some of our creditors agreeing to accept partial cash payments in full satisfaction of liabilities owed to these creditors. Total comprehensive net loss for the third quarter of fiscal 2000 was $516,000, or $0.05 per share, as compared with total comprehensive income of $213,000, or $0.02 per share, for the third quarter of fiscal 1999. Inflation We did not experience any material adverse effects in the third quarter of 1999 or in the third quarter of 2000 due to general inflation. Liquidity and Capital Resources We have suffered substantial recurring losses from operations for the last five consecutive years. Consequently, our ability to continue as a going concern, is dependent upon several factors, including our ability to raise additional capital. FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Management has taken corrective actions to reduce expenses through outsourcing certain operations. Management has also been active in establishing new strategic alliances that it believes will result in increases in revenues in the future through the sale of a greater volume of products. We cannot give any assurances that the actions taken to date will increase revenues or continue to reduce operating losses. Requirements Depending upon the market value of shares of our common stock, any additional financing that we obtain through the sale of common stock under our common stock purchase agreement, described below, or cash that we may receive from the exercise of outstanding warrants may be used to repay and prepay debt and for working capital purposes to fund our continuing operations including research and development and sales and marketing expenses. During the first quarter of 2000, we borrowed $2,000,000 in cash in exchange for, among other things, our issuance of series 1 bridge financing notes that matured in August and September 2000. We received net proceeds equal to $1,737,900 as a result of this bridge financing. Before the maturity dates, the series 1 bridge financing notes accrued interest at the rate of 8% per annum. Currently, since the maturity dates, interest is accruing at a rate of 12% per annum.These series 1 bridge notes are convertible into shares of our common stock at a weighted average per share price of $4.08. We have to pay a premium of 25% of the original principal amount of the notes. In addition to these bridge notes and the attached repricing warrants, we issued warrants to purchase 300,000 shares of common stock. These warrants have a weighted average exercise prices of $4.54 per share.We filed a registration statement on Form SB-2 with the Securities and Exchange Commission on August 8, 2000 for the shares underlying this financing. This registration statement was declared effective on November 7, 2000 after the end of the third quarter of fiscal 2000. FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) Resources Our cash and marketable securities were $156,000 and $367,000 at September 30, 2000 and December 31, 1999, respectively. Working capital was a deficit of $4,658,000 and $2,125,000 at September 30, 2000 and December 31, 1999, respectively. The increase in working capital deficit was primarily due to an increase in short term notes payable relative to the series 1 bridge note financing described above. During 1999, we expended $9,000 for capital equipment to support our growth. During fiscal 2000, we expect to acquire less than $100,000 of capital equipment. We have a revolving credit facility under which we may borrow up to $1,000,000. At September 30, 2000 we had a balance of $618,000 outstanding under this revolving credit facility. During the third quarter of fiscal 2000, we signed a common stock purchase agreement with a private investor for the future issuance and purchase of shares of our common stock. The common stock purchase agreement was amended after the end of the third quarter of fiscal 2000. The common stock purchase agreement establishes what is often referred to as a structured equity line or an equity drawdown facility. In general, the drawdown facility operates as follows: the investor has committed to provide us up to $10 million as we request it over an 18 month period, in return for common stock we issue to the investor, subject to registering in advance the shares of common stock issuable under the purchase agreement under the Securities Act of 1933. Once every 22 trading days, we may request a draw of up to $1 million of that money (except that our initial drawdown may be for up to $2 million), subject to a maximum of 18 draws. The maximum amount we actually can drawdown upon each request will be determined by the volume-weighted average daily price of our common stock for the 22 trading days prior to our request and the average trading volume for the 45 trading days prior to our request. FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Part II. OTHER INFORMATION Item 1. Legal Proceedings The Company is a party to litigation and claims arising in the normal course of its business. Barring unforeseen circumstances, management does not expect the results of these actions to have a material adverse effect on the Company's business or financial condition. Item 2. Change in Securities and Use of Proceeds None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5 Other Information None. FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits EXHIBIT INDEX Exhibit Number Description of Exhibit 2.1 Reorganization Plan of Cambex Corporation dated March 17, 1998 (included as Exhibit 2.1 to the Company's Amendment to Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 2.2 Amended Disclosure Statement with respect to Reorganization Plan of the Company dated March 17, 1998 (included as Exhibit 2.2 to the Company's Amendment to Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 3.1 Restated Articles of Organization of Cambex Corporation (included as Exhibit 3.1 to the Company's registration statement on Form SB-2 (Reg. No. 333-43294) dated August 8, 2000 and incorporated herein by reference). 3.2 Restated By-laws of Cambex Corporation (included as Exhibit 3.2 to the Company's registration statement on Form SB-2 (Reg. No. 333-43294) dated August 8, 2000 and incorporated herein by reference). 4.1 Specimen Stock Certificate(included as Exhibit 4.1 to the Company's registration statement on Form SB-2(Reg. No. 333-43294) dated August 8, 2000 and incorporated herein by reference). 4.2 Registration Rights Agreement among the Company and the Purchasers identified therein (the "Sovereign Purchasers") dated as of January 18, 2000 (included as Exhibit 4.1 to the Company's Amendment to Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Item 6. Exhibit Index (continued) 4.3 Registration Rights Agreement between the Company and Thumberland Limited dated as of July 14, 2000 (included as Exhibit 4.3 to the Company's registration statement on Form SB-2 (Reg. No. 333-43294) dated August 8, 2000 and incorporated herein by reference). 4.4 Amendment to Registration Rights Agreement between the Company and Thumberland Limited dated as of November 8, 2000. 10.1 Employment Agreement between Joseph F. Kruy and the Company, dated as of November 18, 1994 (included as Exhibit 10.1 to the Company's Amendment to Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.2 Incentive Bonus Plan (included as Exhibit 10.2 to the Company's registration statement on Form SB-2 (Reg. No. 333-43294) dated August 8, 2000 and incorporated herein by reference). 10.3 1987 Combination Stock Option Plan (included as Exhibit 10.8 to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1987, and incorporated herein by reference). 10.4 2000 Equity Incentive Plan (included as Exhibit 10.12 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999, and incorporated herein by reference). 10.5 Series 1 Bridge Note Purchase Agreement among the Company and the Sovereign Purchasers dated as of January 18, 2000 (included as Exhibit 10.7 to the Company's Amendment to Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.6 Escrow Agreement among the Company, the Sovereign Purchasers and Suntrust Bank, Atlanta dated as of January 6, 2000 (included as Exhibit 10.8 to the Company's Amendment to Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Item 6. Exhibit Index (continued) 10.7 Placement Agent Agreement between the Company and Sovereign Capital Advisors, LLC ("Sovereign Advisors") dated as of January 18, 2000 (included as Exhibit 10.9 to the Company's Amendment to Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.8 Guaranty Agreement among Joseph F. Kruy, the Company and the Sovereign Purchasers dated as of January 18, 2000. (included as Exhibit 10.10 to the Company's Amendment to Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.9 Guaranty Agreement among CyberFin Corporation, the Company and the Sovereign Purchasers dated as of January 18, 2000 (included as Exhibit 10.11 to the Company's Amendment to Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.10 Stock Pledge Agreement by Joseph F. Kruy in favor of the Sovereign Purchasers dated as of January 18, 2000 (included as Exhibit 10.12 to the Company's Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.11 Stock Pledge Agreement by CyberFin Corporation in favor of the Sovereign Purchasers dated as of January 18, 2000 (included as Exhibit 10.13 to the Company's Amendment to the Quarterly Report on Form 10- Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.12 Series 1 Bridge Financing Note in favor of SovCap Equity Partners, Ltd. dated as of January 18, 2000 (included as Exhibit 10.14 to the Company's Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.13 Series 1 Bridge Financing Note in favor of Correllus International, Ltd. dated as of January 18, 2000 (included as Exhibit 10.16 to the Company's Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Item 6. Exhibit Index (continued) 10.14 Common Stock Purchase Warrant in favor of SovCap Equity Partners, Ltd. dated as of January 18, 2000 (included as Exhibit 10.18 to the Company's Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.15 Common Stock Purchase Warrant in favor of Correllus International, Ltd. dated as of January 18, 2000 (included as Exhibit 10.19 to the Company's Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.16 Sovereign Warrant Agreement between the Company and Sovereign Advisors dated as of January 18, 2000 (included as Exhibit 10.20 to the Company's Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.17 Warrant Certificate registered in the name of Sovereign Advisors dated January 18, 2000 (included as Exhibit 10.21 to the Company's Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.18 Series 1 Bridge Financing Note in favor of Arab Commerce Bank Ltd. dated as of February 9, 2000 (included as Exhibit 10.22 to the Company's Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.19 Common Stock Purchase Warrant in favor of Arab Commerce Bank Ltd. dated as of February 9, 2000 (included as Exhibit 10.24 to the Company's Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.20 Series 1 Bridge Financing Note in favor of SovCap Equity Partners, Ltd. dated as of February 9, 2000 (included as Exhibit 10.25 to the Company's Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 Item 6. Exhibit Index (continued) 10.21 Common Stock Purchase Warrant in favor of SovCap Equity Partners, Ltd. dated as of February 9, 2000 (included as Exhibit 10.27 to the Company's Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended April 1, 2000, and incorporated herein by reference). 10.22 Common Stock Purchase Agreement between the Company and Thumberland Limited dated as of July 14, 2000 (included as Exhibit 10.22 to the Company's registration statement on Form SB-2 (Reg. No. 333- 43294) dated August 8, 2000 and incorporated herein by reference). 10.23 Amendment to Common Stock Purchase Agreement between the Company and Thumberland Limited dated as of November 8, 2000. 10.24 Escrow Agreement among the Company, Thumberland Limited and Epstein, Becker & Green, P.C., dated as of July 14, 2000 (included as Exhibit 10.23 to the Company's registration statement on Form SB-2 (Reg. No. 333-43294) dated August 8, 2000 and incorporated herein by reference). 10.25 Stock Purchase Warrant in favor of Thumberland Limited dated as of July 14, 2000(included as Exhibit 10.24 to the Company's registration statement on Form SB-2 (Reg. No. 333-43294) dated August 8, 2000 and incorporated herein by reference). 10.26 Stock Purchase Warrant in favor of Ladenburg Thalmann & Co. Inc. dated as of July 14, 2000(included as Exhibit 10.25 to the Company's registration statement on Form SB-2 (Reg. No. 333-43294) dated August 8, 2000 and incorporated herein by reference). 27.1 Financial Data Schedule. Item 6. (b) Reports on Form 8-K None. FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 30, 2000 Commission File: 0-6933 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CAMBEX CORPORATION By: /s/ Joseph F. Kruy Joseph F. Kruy President By: /s/ Peter J. Kruy Peter J. Kruy Chief Financial Officer Dated: November 13, 2000