10QSB 1 t10q301.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 29, 2001 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 29, 2001 Common 9,939,480 shares Part I. FINANCIAL INFORMATION Item 1. Financial Statements CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 29, 2001 AND DECEMBER 31, 2000 ASSETS SEPTEMBER 29, DECEMBER 31, 2001 2000 CURRENT ASSETS: CASH AND CASH EQUIVALENTS $ 236,296 $ 234,512 ACCOUNTS RECEIVABLE, Less Reserves of $58,000 in 2001 and $58,000 in 2000 298,451 322,888 INVENTORIES 429,140 460,620 PREPAID EXPENSES 57,669 67,301 TOTAL CURRENT ASSETS $ 1,021,556 $ 1,085,321 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 3,759,506 3,721,481 NET PROPERTY AND EQUIPMENT $ 58,098 $ 96,123 OTHER ASSETS DEFERRED OFFERING COSTS $ 427,975 $ 476,886 OTHER 37,830 37,830 TOTAL OTHER ASSETS $ 465,805 $ 514,716 TOTAL ASSETS $ 1,545,459 $ 1,696,160 2 CONSOLIDATED BALANCE SHEETS SEPTEMBER 29, 2001 AND DECEMBER 31, 2000 LIABILITIES AND STOCKHOLDERS' INVESTMENT SEPTEMBER 29, DECEMBER 31, 2001 2000 CURRENT LIABILITIES: LOAN AGREEMENT $ 1,032,066 $ 1,032,443 NOTES PAYABLE 2,850,000 2,500,000 ACCOUNTS PAYABLE 791,125 584,726 OBLIGATIONS FOR TRADE-IN MEMORY 240,000 240,000 OTHER LIABILITIES-SHORT TERM PORTION 2,398,466 1,692,733 ACCRUED EXPENSES 1,190,437 853,042 TOTAL CURRENT LIABILITIES $ 8,502,094 $ 6,902,944 LONG TERM DEBT $ 1,273,730 $ 1,273,730 OTHER LIABILITIES-LONG TERM PORTION 317,121 1,044,560 DEFERRED REVENUE - - 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 -11,484,738 shares in 2001, and 11,287,847 shares in 2000 $ 1,148,474 $ 1,128,785 CAPITAL IN EXCESS OF PAR VALUE 16,192,802 16,024,049 ACCUMULATED OTHER COMPREHENSIVE INCOME 102,465 102,465 RETAINED EARNINGS (DEFICIT) (25,102,256) (23,903,407) LESS - COST OF SHARES HELD IN TREASURY 1,545,258 in 2001,and 1,537,980 in 2000 (888,971) (876,966) TOTAL STOCKHOLDERS' INVESTMENT $ (8,547,486) $ (7,525,074) TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 1,545,459 $ 1,696,160 3 CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000 For the Quarter Ended For the Nine Months Ended Sept. 29, Sept. 30, Sept. 29, Sept. 30, 2001 2000 2001 2000 REVENUES $ 504,264 $ 700,905 $ 1,388,184 $ 1,758,320 COST OF SALES 225,996 330,458 679,736 888,134 Gross profit $ 278,268 $ 370,447 $ 708,448 $ 870,186 OPERATING EXPENSES: Research and development $ 222,235 $ 421,149 $ 790,929 $ 1,111,862 Selling 79,210 250,196 358,898 767,893 General and administrative 78,220 116,512 345,470 340,110 Total operating expenses $ 379,665 $ 787,857 $ 1,495,297 $ 2,219,865 OPERATING INCOME (LOSS) $(101,397)$(417,410)$ (786,849)$(1,349,679) OTHER INCOME (EXPENSE): Interest expense (143,000) (99,000) (412,000) (276,079) Interest income - - - - Other income (expense) - - - - INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEMS $(244,397)$(516,410)$(1,198,849)$(1,625,758) Provision for income taxes - - - - INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS $(244,397)$(516,410)$(1,198,849)$(1,625,758) Extraordinary Items - - - 102,406 NET INCOME (LOSS) $(244,397)$(516,410)$(1,198,849)$(1,523,352) OTHER COMPREHENSIVE INCOME, NET OF TAX: Foreign Currency translation Adjustments - - - - OTHER COMPREHENSIVE INCOME $ - $ - $ - $ - TOTAL COMPREHENSIVE INCOME (LOSS)$(244,397)$(516,410)$(1,198,849)$(1,523,352) INCOME(LOSS)PER COMMON SHARE $ (0.02)$ (0.05)$ (0.12)$ (0.16) Weighted Average Common Shares Outstanding 9,940,000 9,730,000 9,875,000 9,660,000 Weighted Average Common and Common Equivalent Shares Outstanding 9,940,000 10,390,000 9,875,000 10,390,000 4 CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT Common Stock Capital in Accumulated Retained Cost of $.10 Excess of Other Earnings Shares Par Value Par Value Comprehensive (Deficit) Held in Income Treasury BALANCE AT JANUARY 1, 2000 $1,107,623 $15,970,199 $101,989$(21,931,920)$(854,766) ADD: Net 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 - - - Purchase of shares for the treasury - - - - (22,200) BALANCE AT September 30, 2000 $1,126,962 $15,984,266 $101,989 (23,455,272)$(876,966) BALANCE AT JANUARY 1, 2001 $1,128,785 $16,024,049 $102,465 (23,903,407)$(876,966) ADD: Net loss $ - $ - $ - $( 1,198,849)$ - Purchase of shares for the treasury - - - - (12,005) Conversion of note payable 19,439 164,322 - - - Issuance of warrants - 1,400 - - - Issuance of common stock 250 3,031 - - - BALANCE AT SEPTEMBER 29, 2001 $1,148,474 $16,192,802 $102,465 (25,102,256)$(888,971) 5 CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE NINE MONTHS ENDED SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000 Nine Months Ended September 29, September 30, 2001 2000 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $(1,198,849)$(1,523,352) Adjustments to reconcile net income(loss) to net cash provided by(used in) operating activities: Depreciation $ 38,025 $ 61,717 Amortization of prepaid expenses 7,225 7,210 Change in assets and liabilities: Decrease (increase) in accounts receivable 24,437 ( 165,765) Decrease(increase)in inventory 31,480 156,875 Decrease(increase)in prepaid expenses 2,407 ( 4,513) Increase(decrease)in accounts payable 206,399 54,156 Increase(decrease)in obligations for trade-in memory - ( 46,250) Increase(decrease)in accrued expenses 337,395 87,057 Increase(decrease)in deferred revenue - ( 100,116) Increase(decrease)in other liabilities ( 21,706) ( 504,175) Total adjustments $ 625,662 $( 453,804) Net cash provided by(used in) operating activities $( 573,187)$(1,977,156) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of equipment, net $ - $ - Net cash provided by(used in)investing activities $ - $ - CASH FLOWS FROM FINANCING ACTIVITIES: Increase(decrease) in notes payable $ 350,000 $ 1,737,940 Proceeds from sale of common stock and warrants 188,442 33,406 Purchase of common stock for the treasury ( 12,005) ( 22,200) Decrease in deferred offering costs 48,911 - Net borrowings (repayments)under loan agreement ( 377) 17,058 Net cash provided by (used in) financing activities $ 574,971 $ 1,766,204 Effect of exchange rate changes on cash - - Net increase (decrease) in cash and cash equivalents $ 1,784 $( 210,952) Cash and cash equivalents at beginning of year 234,512 366,743 Cash and cash equivalents at end of period $ 236,296 $ 155,791 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 50,000 $ 67,618 Income Taxes - - Non-cash financing activity: Conversion of note payable into common stock $ 183,761 $ - 6 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 Commission File: 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-KSB. 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 29, December 31, 2001 2000 Raw materials $ 341,147 $ 392,686 Work-in-process 51,705 20,453 Finished goods 36,288 47,481 $ 429,140 $ 460,620 7 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 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. 8 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 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 any 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 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 design and supply fibre channel hardware and software products used to build storage area networks (SANs). SANs enhance and simplify the centralized management and sharing of storage resources while providing improved availability, scalability, performance, and disaster recovery. SANs have been enabled by the emergence of fibre channel, a new generation of server to storage communications technology. We develop and offer fibre channel host bus adapters and hubs, high availability software, fibre channel RAID disk arrays and management software for the deployment of SAN solutions. We supplement our own fibre channel product offerings by reselling fibre channel SAN hardware and software solutions from leading manufacturers. We also offer SAN design, integration, and implementation services to value-added resellers (VARs) and end-users. 9 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 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 29, 2001 and the quarter ended September 30, 2000 Our revenues were $504,000 for the quarter ended September 29, 2001 and $701,000 for the quarter ended September 30, 2000. Revenues for the three months ended September 29, 2001 decreased 28% compared to revenues for the same three months in the prior year due to decreases of approximately 61% in service revenues more than offsetting the growth in sales of our fibre channel connectivity products by approximately 2% to approximately 87% of total revenues in the third quarter of fiscal 2001. Gross profit rate was 55% of sales for the three months ended September 29, 2001 and 53% for the three months ended September 30, 2000. Operating expenses for the three months ended September 29, 2001 decreased by 52% in comparison to operating expenses for the comparable three months of the prior year. Research and development expenses for the three months ended September 29, 2001 decreased by 47% compared to the amount of these expenses in the third quarter of fiscal 2000 due to decreases in contract services. Selling expenses for the three months ended September 29, 2001 decreased by 68% compared to the amount of these expenses in the third quarter of fiscal 2000 due to decreases in headcount and related expenses. General and administrative expenses decreased by 33% for the three months ended September 29, 2001 compared to the three months ended September 30, 2000 due to legal expenses relating to registering shares of common stock under the Securities Act of 1933 incurred in the third quarter of fiscal 2000. Interest expense increased by 44% for the three months ended September 29, 2001 compared to the three months ended September 30, 2000. This increase in interest expense was primarily due to funds borrowed in 2000. We borrowed $2,000,000 in January and February 2000 in exchange for, among other things, our issuance of series 1 bridge financing notes that accrued interest at the rate of 8% per annum until their maturity in August and September 2000. Since their maturity, these notes are accruing interest at the rate of 12% per annum. During 2001, we borrowed $350,000 in exchange for, among other things, our issuance of 12% promissory notes. The borrowings which led to the 44% interest expense 10 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 Commission File: 0-6933 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) increase were necessary to finance the development of new products and the establishment of the sales and marketing infrastructure for the distribution of such products and for working capital purposes. Total comprehensive net loss for the third quarter of fiscal 2001 was $224,000, or $0.02 per share, as compared with $516,000, or $0.05 per share, for the third quarter of fiscal 2000. Inflation We did not experience any material adverse effects in the third quarter of 2000 or in the third quarter of 2001 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, but not limited to our ability to generate revenues in significantly greater amounts than in the past two fiscal years, our ability to raise additional capital and the assumption that certain of our lenders will accept shares of our common stock instead of cash in satisfaction of our obligations. Our working capital deficit is a significant threat to our ability to continue as a going concern. Management has 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. Management has also been active in trying to secure additional capital. We cannot give any assurances that the actions taken to date will increase revenues or raise additional capital. 11 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 Commission File: 0-6933 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) 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 we entered into in 2000 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. The series 1 bridge financing notes bore interest at the rate of 8% per annum prior to their respective maturity dates. Since their respective maturity dates, interest is accruing at a rate of 12% per annum. These bridge notes are convertible into shares of our common stock at a weighted average per share price of $4.08. Because the bridge notes matured before we registered, under the Securities Act of 1933, as amended, the offer and resale of shares of our common stock issuable upon conversion of the bridge notes and exercise of the repricing warrants and the common stock purchase warrants, we owe premiums and penalties totaling approximately $607,000 (in addition to the repayment of principal and interest). Following conversion of the bridge notes, if the lenders do not realize at least a 20% gain on shares of common stock that they choose to sell during the 90 days following conversion, then the lenders are entitled to acquire additional shares of common stock at a price of $0.10 per share through the exercise of repricing warrants. 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 price of $4.54 per share. 12 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 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 $236,000 and $235,000 at September 29, 2001 and December 31, 2000, respectively. Working capital was a deficit of $7,481,000 and $5,818,000 at September 29, 2001 and at December 31, 2000, respectively. The increase in working capital deficit was primarily due to the loss for the first nine months of 2001. During 2000, we did not expend any funds for capital equipment. During fiscal 2001, we expect to acquire less than $100,000 of capital equipment. We have a revolving credit facility under which we may borrow up to $1,050,000. At September 29, 2001 we had a balance of $1,032,000 outstanding under this revolving credit facility. During the third quarter of fiscal 2000, we signed a common stock purchase agreement with Thumberland Limited, a private investor, for the future issuance and purchase of shares of our common stock. The common stock purchase agreement was amended during the fourth 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 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. Per the terms of this agreement, we are currently unable to draw because we cannot meet the minimum draw amount of $250,000. We filed registration statements on Form SB-2 with the Securities and Exchange Commission registering 4,981,542 shares issuable in connection with the bridge loan financing from the Sovereign Lenders and the purchase agreement with Thumberland. Those registration statements were declared effective on November 7, 2000 and December 22, 2000. Pursuant to Securities and Exchange Commission comments, we filed a post-effective amendment on Form SB-2 in the second quarter of 2001 and plan to file an additional 13 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 Commission File: 0-6933 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) amendment after the consummation of the transaction referred to in Part III. Item 6(b). We need additional capital and additional financing may not be available. If our stock price and trading volume stay at current levels, we will not be able to draw down any of the $10 million under the common stock purchase agreement with Thumberland Limited. We believe that the combination of current existing cash, available borrowing capacity and our ability to obtain additional long-term indebtedness is not adequate to finance our operations for our current activities and foreseeable future. Currently, we have reduced our cash burn rate to approximately $40,000 per month at the current sales levels. For each 10 percent reduction in sales, our cash burn rate would increase by approximately $10,000 per month. Conversely, for each 10 percent increase in sales volume, our cash burn rate would decrease by approximately $10,000 per month. However, if circumstances change and we become able to draw the maximum amount under the equity drawdown facility, then, our available cash resources combined with the maximum drawdown under the equity draw down facility would be sufficient to meet our anticipated working capital and capital expenditure requirements through at least the next 24 months. In order to drawdown the minimum amount of $250,000 under our equity drawdown facility, the average daily trading volume for the 45 trading days prior to our drawdown notice multiplied by the average of the volume-weighted average daily prices of our common stock for the 22 trading days prior to the notice would have to equal or exceed $56,819. For example, if the average volume-weighted average daily price of our common stock was $1.00 and the average daily trading volume for the 45 days prior to our drawdown notice was 56,819, we would be able to draw down the minimum amount of $250,000. The closing price for our common stock on September 28, 2001 was $0.24 per share and the average daily trading volume for the 45 days preceding September 28, 2001 was 6,282 shares which is not sufficient to allow us to be able draw down the minimum amount of $250,000. At the present sales levels and current expense levels, if we are able to draw, the minimum drawdown of $250,000 would be adequate to meet our anticipated working capital and capital expenditure requirements for approximately six months. The time period for which we believe our capital is sufficient and the burn rate are estimates. The actual time period and burn rate may differ materially as a result of a number of factors, risks and uncertainties that are described in this prospectus. In addition, business and economic conditions may not make it feasible to draw 14 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 Commission File: 0-6933 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) down under the facility at every opportunity, and drawdowns are available only every 22 trading days. We are actively pursuing raising additional capital but our ability to raise investment capital during the term of the common stock purchase agreement is restricted with regard to under market offerings, and if we need capital but are unable to drawdown under the common stock purchase agreement for any reason, we may not be able to meet our anticipated working capital requirements. We are attempting to raise additional capital to cover the burn rate not covered by incremental gross profit. This amount is dependent upon sales. If sales do not increase or capital cannot be raised to cover the current burn rate, we intend to reduce operating expenses as much as practicable to continue operations until balance is established. If we are not successful in raising additional capital or increasing our sales to adequate levels, we will not be able to continue our current operations and there is substantial doubt as to our ability to continue as a going concern. There can be no assurance that we will be successful in raising such additional capital at all or on terms commercially acceptable to us or our shareholders. In addition, the sale of equity securities could result in the dilution of the percentage ownership of existing shareholders and could also adversely affect the market price of our common stock. 15 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 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. 16 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 Commission File: 0-6933 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits EXHIBIT INDEX The following exhibits are filed herewith or incorporated by reference herein. Exhibit 3.1 Restated Articles of Organization of Cambex Corporation (included as Exhibit 3.1 to the Company's Registration Statement on Form SB-2, declared effective with the Commission on November 7, 2000, Reg. No. 333-43294, 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, declared effective with the Commission on November 7, 2000, Reg. No. 333-43294, 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, declared effective with the Commission on November 7, 2000, Reg. No. 333-43294, 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). 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, declared effective with the Commission on November 7, 2000, Reg. No. 333-43294, and incorporated herein by reference). 4.4 Amendment to Registration Rights Agreement between the Company and Thumberland Limited dated as of November 8, 2000 (included as Exhibit 4.4 to the Company's Quarterly Report on Form 10-QSB for the quarter ended September 30, 2000 and incorporated herein by reference). 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). 17 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 Commission File: 0-6933 Item 6. Exhibit Index (continued) 10.2 Incentive Bonus Plan (included as Exhibit 10.2 to the Company's Registration Statement on Form SB-2, declared effective with the Commission on November 7, 2000, Reg. No. 333-43294, 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). 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). 18 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 Commission File: 0-6933 Item 6. Exhibit Index (continued) 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). 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). 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). 19 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 Commission File: 0-6933 Item 6. Exhibit Index (continued) 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, declared effective with the Commission on November 7, 2000, Reg. No. 333-43294, 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 (included as Exhibit 10.23 to the Company's Quarterly Report on 10QSB for the quarter ended September 30, 2000, and incorporated herein by reference). 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, declared effective with the Commission on November 7, 2000, Reg. No. 333-43294, 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, declared effective with the Commission on November 7, 2000, Reg. No. 333-43294, 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, declared effective with the Commission on November 7, 2000, Reg. No. 333-43294, and incorporated herein by reference). 10.27 Loan and Security Agreement, as amended, by and between the Company and BA Associates, Inc. (included as Exhibit 10.27 to the Company's Registration Statement on Form SB-2 filed with the Commission on November 29, 2000, Reg. No. 333-50936, and incorporated herein by reference.) 10.28 Fifth Amendment to Loan and Security Agreement, as amended, by and between the Company and B.A. Associates, Inc., dated as of December 27, 2000 (included as Exhibit 10.28 to the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000 and incorporated herein by reference). 10.29 Form of Warrant Certificate between the Company and B.A. Associates, Inc. (included as Exhibit 10.28 to the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000 and incorporated herein by reference). 99.1 Press Release dated November 7, 2001 (included as Exhibit 99 to the Company's Report on Form 8-K filed on November 7, 2001 and incorporated herein by reference). 20 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 Commission File: 0-6933 Item 6. Exhibits and Reports on Form 8-K (continued) (b) Reports on Form 8-K On November 7, 2001, we filed a Report on Form 8-K disclosing that we have entered into a letter of intent with Super PC Memory, Inc., a privately-held company, pursuant to which Super PC Memory would become a wholly-owned subsidiary of Cambex Corporation. The transaction is subject to completion of a definitive agreement and approval by their respective Boards of Directors and the satisfactory completion of due diligence and other conditions. 21 FORM 10-QSB CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 29,2001 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 and Treasurer Dated: November 13, 2001 22