MIRA INFORM REPORT

Report Date :

25.05.2011

IDENTIFICATION DETAILS

Name :	CASCADE MICROTECH, INC.
Registered Office :	1331 Lovejoy St Ste 900, Portland Or 97209
Country :	United States
Financials (as on) :	31.12.2010
Date of Incorporation :	24.02.1984
Com. Reg. No.:	17500919
Legal Form :	Corporation for Profit
Line of Business :	Engineers-Electrical

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :
Status :	Moderate
Payment Behaviour :	Regular
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31^st, 2011

Country Name	Previous Rating (31.12.2010)	Current Rating (31.03.2011)
United States	a1	a1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Bottom of Form

GEOPOLITICS - UNITED STATES

POLITICAL DATA	ECONOMIC DATA
Form of Government: Federal Economic Risk: Nil	Currency: USD Branch Situation: Competitive

IDENTIFICATION

Ordered as:	Cascade Microtech INC
Address in the order:	2430 N.W. 206th Ave, Beaverton OR 97006
Legal Name:	CASCADE MICROTECH, INC.
Legal Address	1331 LOVEJOY ST STE 900 PORTLAND OR 97209
Operative Address	2430 NW 206th Avenue Beaverton, OR 97006
Telephone:	503-601-1000	Registration Number :	17500919
Fax:	503-601-1002	Legal Form:	Corporation for Profit
Email:	N.A.	Registered in:	Oregon
Website:	http://www.cmicro.com/	Date Created:	1983
Manager:	Michael Burger	Date Incorporated:	February 24, 1984
Staff:	401	Stock:	N.A.
		Value:	N.A.
Activity:	Engineers-Electrical

BANKS

Name of the Bank	US NATIONAL BANK
Location	321 SW 6TH AVE PORTLAND OR 97204
Name of the Bank	SEATTLE FIRST NATIONAL BANK
Location	PO BOX 84448 SEATTLE WA 98124

BUSINESS

PRINCIPAL ACTIVITY
	Cascade Microtech, Inc. designs, develops, manufactures, and markets wafer probing and test socket solutions for the electrical measurement and testing of high performance chips.
Products/Services description:
	It offers a range of product lines, including probe stations, analytical probes, production probe cards, test sockets, and various services. The engineering probe station is used in conjunction with analytical probes to test chips in wafer form for forming a probing system; and analytical probes, production probe cards, and test sockets electrically connect test equipment to the chips under test and are sold as consumable test tooling, which are mounted into production or engineering probe stations. The company also offers Pyramid Probe card product line for use in wireless chip applications, as well as probe station accessories, including thermal control systems, microscopes, lasers, cameras, special cables, and connectors and other items. In addition, it provides installation and maintenance services.
Sales are:
	Wholesale, Retail
Clients:
	The company sells its products to semiconductor manufacturers, test subcontractors, research organizations, and designers (Fujitsu Semiconductor, IBM, Intel, Sony, and Texas Instruments) through a combination of manufacturers’ representatives, distributors, and direct sales people.
Suppliers:
	The company has a development alliances with test equipment giant Agilent Technologies.
Operations area:
	National, International
The company imports from worldwide
The company export to Asia Pacific and Europe
Trade References:
	Trade references could not be obtained.
Competitors:
	EG Systems, LLC FormFactor, Inc. Teradyne, Inc.
The subject employs 401 employee(s)
PAYMENTS
	regular
LOCATION
Headquarters
	The company is headquartered and single located at the above operative address. The legal address is the one registered at the Secretary of State of Oregon and is that of the registered agent.
Branches:
	The company has several branches all over the US.

Shareholders - Manager - Related Companies

Listed at the stock exchange:
	NO
Management:
	Chairman F. Paul Carlson President, CEO, and Director Michael Burger VP Operations Steve Mahon

Financials - COMMERCIAL TRENDS AND FORECAST

The subject is a public company traded at the stock exchange NasdaqGM under the symbol CSCD. Please find enclosed the financial statements.

Legal Fillings

There are many UCC** files listed with the Secretary of State of Oregon.

There are no legal filings listed with the District Court.

THE COMPANY IS NOT LISTED ON THE OFAC LIST.*

For information:

* The Specially Designated Nationals (SDN) List is a publication of OFAC which lists individuals and organizations with whom United States citizens and permanent residents are prohibited from doing business.

** The Uniform Commercial Code (UCC) is one of a number of uniform acts that have been promulgated in conjunction with efforts to harmonize the law of sales and other commercial transactions in all 50 states within the United States of America.

The UCC deals primarily with transactions involving personal property (movable property), not real property (immovable property).

It allows a creditor to notify other creditors about a debtor’s assets used as collateral for a secured transaction by filing a public notice (financing statement) with a particular filing office.

The Uniform Commercial Code Bureau files and maintains on financial obligations (including IRS liens) incurred by individuals (in business as a sole proprietor), business entities and corporations.

Rating

Local credit bureau gave a low credit rate. The company is in Good Standing. This means that all local and federal taxes were paid on due date.
Final Opinion
	The company has 28 years in the business. It is a medium sized American company, evolving in a competitive sector. Profitability is negative, indebtedness is low, cash is good and payments are regular. We did not find a specific adverse record against the subject. The last two quarter show a positive profitability but it has been negative for the last 3 years. Thus, we suggest working with guarantees while monitoring the evolution of the company and making an update of this report in 6 months.

SUMMARY

FINANCIAL SUMMARY		DEBT COLLECTIONS AND PAYMENTS
Profitability	NEGATIVE	Public Records	NO
Indebtedness	LOW	Payments	REGULAR
Cash	GOOD

Financial

Income Statement Annual Data Figures in thousands of USD

Period Ending		Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Total Revenue		95,799	53,541	76,561
Cost of Revenue		59,714	33,840	44,477
Gross Profit		36,085	19,701	32,084
	Operating Expenses
	Research Development	12,612	8,372	10,473
	Selling General and Administrative	33,046	21,724	29,311
	Non Recurring	-	-	27,701
	Others	783	567	2,461
	Total Operating Expenses	-	-	69,946
Operating Income or Loss		(10,356)	(10,962)	(37,862)
	Income from Continuing Operations
	Total Other Income/Expenses Net	(38)	93	1,038
	Earnings Before Interest And Taxes	(10,324)	(10,555)	(36,824)
	Interest Expense	-	-	-
	Income Before Tax	(10,324)	(10,555)	(36,824)
	Income Tax Expense	15	(2,906)	(2,247)
	Minority Interest	-	-	-
	Net Income From Continuing Ops	(10,339)	(7,649)	(34,577)
	Non-recurring Events
	Discontinued Operations	-	-	-
	Extraordinary Items	-	-	-
	Effect Of Accounting Changes	-	-	-
	Other Items	-	-	-
Net Income		(10,339)	(7,649)	(34,577)
Preferred Stock And Other Adjustments		-	-	-
Net Income Applicable To Common Shares		(10,339)	(7,649)	(34,577)

Income Statement Quarterly Data Figures in thousands of USD

Period Ending		Mar 31, 2011	Dec 31, 2010	Sep 30, 2010	Jun 30, 2010
Total Revenue		27,845	27,128	25,273	23,439
Cost of Revenue		16,617	15,171	14,850	15,120
Gross Profit		11,228	11,957	10,423	8,319
	Operating Expenses
	Research Development	3,207	3,067	3,038	3,041
	Selling General and Administrative	7,611	8,042	7,075	8,073
	Non Recurring	-	-	-	-
	Others	203	203	200	200
	Total Operating Expenses	-	-	-	-
Operating Income or Loss		207	645	110	(2,995)
	Income from Continuing Operations
	Total Other Income/Expenses Net	(17)	(61)	(431)	542
	Earnings Before Interest And Taxes	209	600	(312)	(2,440)
	Interest Expense	-	-	-	-
	Income Before Tax	209	600	(312)	(2,440)
	Income Tax Expense	103	333	41	413
	Minority Interest	-	-	-	-
	Net Income From Continuing Ops	106	267	(353)	(2,853)
	Non-recurring Events
	Discontinued Operations	-	-	-	-
	Extraordinary Items	-	-	-	-
	Effect Of Accounting Changes	-	-	-	-
	Other Items	-	-	-	-
Net Income		106	267	(353)	(2,853)
Preferred Stock And Other Adjustments		-	-	-	-
Net Income Applicable To Common Shares		106	267	(353)	(2,853)

Balance Sheet Annual Data Figures in thousands of USD

Period Ending		Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Assets
Current Assets
	Cash And Cash Equivalents	23,575	19,471	3,750
	Short Term Investments	870	13,383	28,795
	Net Receivables	20,816	13,479	13,903
	Inventory	20,764	16,624	19,479
	Other Current Assets	934	763	1,367
Total Current Assets		66,959	63,720	67,294
Long Term Investments		-	750	2,465
Property Plant and Equipment		9,973	12,010	13,580
Goodwill		985	-	-
Intangible Assets		3,142	1,858	4,425
Accumulated Amortization		-	-	-
Other Assets		2,821	2,386	455
Deferred Long Term Asset Charges		665	220	237
Total Assets		84,545	80,944	88,456
Liabilities
Current Liabilities
	Accounts Payable	12,664	5,852	7,886
	Short/Current Long Term Debt	13	11	19
	Other Current Liabilities	3,338	1,071	1,120
Total Current Liabilities		16,015	6,934	9,025
Long Term Debt		18	29	62
Other Liabilities		2,797	2,540	2,356
Deferred Long Term Liability Charges		109	56	313
Minority Interest		-	-	-
Negative Goodwill		-	-	-
Total Liabilities		18,939	9,559	11,756
Stockholders' Equity
Misc Stocks Options Warrants		-	-	-
Redeemable Preferred Stock		-	-	-
Preferred Stock		-	-	-
Common Stock		145	135	132
Retained Earnings		(24,702)	(14,363)	(6,714)
Treasury Stock		-	-	-
Capital Surplus		90,967	85,584	83,213
Other Stockholder Equity		(804)	29	69
Total Stockholder Equity		65,606	71,385	76,700
Net Tangible Assets		61,479	69,527	72,275

Additional information

Company Profile

Subject design, develop, manufacture and market advanced wafer probing and test socket solutions for the electrical measurement and testing of high performance chips. Subject design, manufacture and assemble their products in Oregon, Minnesota and Dresden, Germany, with global sales, service and support centers in North America, Germany, Japan, Taiwan, China and Singapore.

Probe stations provide precise and accurate measurement of semiconductor electrical characteristics during chip design or when optimizing the chip fabrication process. Their probe stations are highly configurable and are typically sold with various accessories, including their analytical probes, as well as accessories from third parties. In addition, they design and build custom probe stations to address the specific requirements of their customers and generate revenue through the sales of service contracts.

Their analytical probes are sold to serve as components of their probe stations, or less often, to serve as components of test equipment manufactured by third parties. Their production probe cards are designed and sold for high-volume production test applications, ranging from very low current parametric testing to sophisticated, high speed radio frequency testing. Their test sockets are designed and sold for both production and engineering test applications, typically for high speed digital and radio frequency testing.

In January 2010, they acquired SUSS MicroTec Test Systems GmbH (“SUSS Test”), a wholly owned subsidiary of SUSS MicroTec AG, based near Dresden, Germany. The acquisition of SUSS Test, a long-time competitor in the market for probe stations, provides them with an expanded portfolio of products, as well as the engineering and technical resources to help address complex emerging markets, such as high brightness LED and Cryogenic test.

Industry Background

The convergence of mobile, computer and consumer devices is accelerating, which provides new opportunities for testing complex devices. According to IC Insights, the overall semiconductor market grew almost 32% in 2010 and is projected to grow another 10% in 2011. Over the next decade, they see three major trends occurring in the market: the continued drive to smaller geometries, the drive for more compactness using 3D/TSV (Through Silicon Vias) technology and the diversification into integrating the physical interfaces into the semiconductor device package. They are well positioned to take advantage of all these trends.

To reduce the cost and increase the performance of electronic products, semiconductor chips have become smaller and faster and incorporate greater levels of functionality at a lower price. Advancements in manufacturing technologies, such as smaller chip elements, new materials and larger wafer sizes have permitted manufacturers to meet these requirements. However, these advancements in chip manufacturing technologies have led to increasing challenges in the design, manufacturing and testing of chips.

Chips are measured and tested multiple times throughout the design and manufacturing process to ensure the integrity of the chip design and the quality of the manufacturing process. Their products test chips during design, where precision and accuracy are required, and during production, where rapid testing at high volumes requires reliability and repeatability. Their strong presence in engineering test segments gives them high visibility of new chip processes and applications, thus aiding their planning and development of production tools.

They sell their solutions to most segments of the semiconductor industry, including manufacturers of wireless, communications, microprocessors and other logic and memory chips. A substantial portion of their revenue is generated from sales of their probe stations and analytical probes to research

Products

They design, manufacture and sell multiple product lines, including probe stations, analytical probes, production probe cards, test sockets and various services. An engineering probe station is used in conjunction with their analytical probes to test chips in wafer form, together forming a probing system. Analytical probes, production probe cards and test sockets electrically connect test equipment to the chips under test and are sold as consumable test tooling, which are mounted into production or engineering probe stations.

Engineering probing systems are required in the development of new generations of chip processes and designs, and they expect that the demand for systems will continue to grow with the increasing complexity of new chip processes and designs. The process development complexities and costs have continually increased as each generation of semiconductor process has required the integration of more layers of smaller chip elements incorporating a longer list of new materials. Probing systems are a basic tool for characterizing and verifying the electrical performance, reliability and repeatability of the new chip elements.

They believe that they have significant market share by revenue in probing tools worldwide. They typically offer the widest product options and the highest electrical measurement performance for most engineering test requirements.

Probe Stations

They offer probe stations for 300mm, 200mm and 150mm or smaller wafer sizes. Probe stations are highly configurable depending upon the size and type of wafer, the particular characteristics of the chip that the customer is testing, the required measurements, the temperatures at which the chip is tested and the test equipment that the customer is using. Their probe stations are available in either manual or semiautomatic versions. They also offer many probe station accessories, including thermal control systems, microscopes, lasers, cameras, special cables and connectors and other items.

They are continually enhancing their products to meet customer and industry requirements. Two examples are the EDGE module and VueTrack™ technology. The EDGE module, released for sale in March of 2010, is a field-upgradable retrofit to most Cascade Microtech probe stations, and includes software tools for 1/f noise modeling and statistical analysis, which support noise measurement up to 10 MHz. In addition, with the new EDGE hardware, they now offer a lower-cost, fully-integrated EDGE measurement system for frequency ranges up to 40 MHz, which includes site preparation, validation and equipment installation. Both solutions utilize new software with features such as advanced graphical viewer, statistical analysis and automatic report creation. With carefully engineered ultra-low background noise, EDGE 1/f noise measurement solutions offer low-level noise measurement over the widest commercially available frequency range (1 Hz to 40 MHz) for flicker noise measurement as well as standard DC parametric testing.

In August 2010, they released VueTrack technology for unattended, over-temperature test, which enables automatic probe-to-pad alignment by using a downward-looking microscope for measuring the probe tips and the wafer locations with the chuck in the same position in which the electrical measurement will be made. By enabling unattended testing over multiple temperatures ranging from -50 to 300°C, VueTrack can eliminate the need for operator intervention and provide increased data throughput and high electrical test accuracy.

Technology

They are a leading innovator in developing electrical measurement and production test tools. One of their stated growth strategies is to continue to develop next-generation technologies. They have focused their research and development efforts on enabling their customers to take more precise electrical measurements in less time, on smaller and more dense devices, and with more robustness. Their core technologies include:

· Broadband/High-Frequency/High Speed Interconnects and Probing. In 1983, their founders created the first microwave analytical probes that enabled the first on-wafer 18 GHz measurements and accelerated the commercialization of gallium arsenide chips. They use and maintain a wide variety of design, verification, fabrication and calibration technologies for high-frequency probes and interconnections. For example, they have developed a complete library of high-frequency circuit elements for their Pyramid Probe layouts, similar to passive element libraries for chip foundries. They believe that these technologies provide a competitive advantage by allowing them to more effectively design and commercialize production probe cards, test sockets and analytical probes.

· Precision On-Wafer Measurements. In 1993, they were first to commercialize a shielded probe station utilizing their patented MicroChamber technology that increased thermal measurement productivity by 10 times and current measurement resolutions by 1,000 times. Many of their engineering probe stations feature MicroChambers, which ensure a dark, electrically noise-free measurement environment to enable low-current measurements over a wide thermal range. Their engineering probe stations also incorporate their proprietary low-noise thermal chuck technologies that increase measurement integrity and reduce the time required to take precise measurements. In early 2008, they introduced their Elite 300 probe station which improved low-current and low-voltage measurements. With the acquisition of Suss Test in 2010, their technology capabilities have been further enhanced to enable precise measurements at cryogenic temperatures and at various pressure levels.

· Microfabrication. Since 1990, they have shipped products that utilize their proprietary lithographic manufacturing processes for depositing, lithographic patterning, etching and plating probe structures on flexible substrates that are similar to the processes used in making chips. Their proprietary Pyramid technology has been under development since 1992

Research and Development

Their industry is subject to rapid technological change and new product introductions and improvements. Their continued investment in research and development and timely introduction of new products and services is critical to maintaining and improving their competitive position. Their growth depends upon their ability to rapidly develop new products that enable customers to improve their electrical, optical and mechanical measurements and increase their productivity. As a result, they expect to continue to devote substantial resources to research and development. Their research and development expense was $12.6 million in 2010, $8.4 million in 2009 and $10.5 million in 2008. They are currently devoting substantial resources to enhancing the functionality of their probe stations and developing new products for adjacent markets. They are also devoting substantial resources to production probe cards that address non-RF applications. At December 31, 2010, they employed 66 research and development engineers. They conduct research and development for all of their product lines at their facilities in Oregon, Germany and Minnesota.

Manufacturing and Assembly

Their manufacturing and assembly operations consist of the production of highly complex and sophisticated components and assemblies, some of which are customized to meet customers’ needs and specifications. They perform nearly all of their manufacturing and assembly at their facilities in Beaverton, Oregon and Dresden, Germany. They also have a manufacturing facility in Brooklyn Park, Minnesota, where they make their test sockets. They outsource the manufacturing and assembly of some products and components to the extent they can be purchased at a cost that is lower than the cost to produce internally, and still meet the expectations and requirements of their customers. They depend on limited source suppliers for some materials, components and subassemblies used in their products.

Their product design and manufacturing process activities emphasize accurate electrical measurements, precise and reliable mechanical components and assemblies and compliance with industry and governmental safety requirements. They prototype and test their new standard product designs and components to ensure high electrical signal integrity, mechanical accuracy and safety. In their manufacturing operations, they perform electrical, mechanical and chemical tests and use statistical process control methods, internally developed manufacturing information systems and inspections of purchased components and products to monitor their product quality throughout the various stages of their manufacturing process.

Employees

As of December 31, 2010, they had a total of 401 employees. Of these employees, 248 were located in North America,110 were in located in Europe, 15 were located in Singapore, 14 were located in Japan, 10 were located in Taiwan, and 4 were located in other Asian counties. Many of their employees are highly skilled and their future performance depends largely on their ability to continue to attract, train and retain qualified technical, sales, service, marketing and managerial personnel. None of their employees are subject to a collective bargaining agreement. They have not experienced any work stoppages and consider their relations with their employees to be good.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.25
UK Pound	1	Rs.72.82
Euro	1	Rs.63.58

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
----	NB	New Business	----

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.