<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
F O R M 10 - QSB
Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act
of 1934
For the Quarter Ended Commission File Number 0-12370
April 30, 1998
SI TECHNOLOGIES, INC.
---------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 95-3381440
- ------------------------------- ------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
4611 South 134th Place, Seattle, Washington 98168
---------------------------------------------------
(Address of principal executive offices) (Zip Code)
(206) 244-6100
---------------------------------------------------
Registrant's telephone number, including area code
SAME
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Check 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 ________
(APPLICABLE ONLY TO CORPORATE ISSUERS)
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date. 3,387,904 shares of
Common Stock, par value $.01 on June 10, 1998.
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<PAGE> 2
ITEM 1. FINANCIAL STATEMENTS
SI TECHNOLOGIES, INC.
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
April 30, July 31,
----------- -----------
Assets 1998 1997
----------- -----------
<S> <C> <C>
Current assets:
Cash $ 105,598 $ 155,826
Trade accounts receivable, less allowance for doubtful
accounts of $148,398 and $147,715 respectively 4,025,974 2,969,852
Inventory 3,979,713 3,465,316
Deferred tax asset 250,945 262,100
Refundable income taxes -- 702,546
Other current assets 192,710 301,856
----------- -----------
Total current assets 8,554,940 7,857,496
Property and equipment, less accumulated depreciation
and amortization 1,233,588 1,477,401
Other assets:
Intangible assets, net 7,429,741 7,613,787
Other 591,069 656,042
----------- -----------
$17,809,338 $17,604,726
=========== ===========
Liabilities and stockholders' equity
Current assets:
Notes payable to bank $ -- $ 3,137,300
Current maturities of long term debt 392,800 392,800
Put option obligations -- 385,000
Trade accounts payable 1,406,632 2,044,959
Income taxes payable 57,541 --
Accrued liabilities 826,976 1,193,261
----------- -----------
Total current liabilities 2,683,949 7,153,320
Long term debt, less current maturities 4,265,701 4,348,405
Deferred taxes 178,300 178,300
Stockholders' equity
Common stock, par value $.01 per share. Authorized
10,000,000 shares; issued and outstanding, 3,387,904 shares
in 1998 and 2,547,240 shares in 1997 33,879 23,472
Preferred stock, par value $.01 per share. Authorized
2,000,000; none outstanding -- --
Additional paid-in capital 9,468,202 5,393,256
Retained earnings 1,179,307 521,923
----------- -----------
Total stockholders' equity 10,681,388 5,938,651
----------- -----------
$17,809,338 $17,618,676
=========== ===========
</TABLE>
See notes to consolidated financial statements
2
<PAGE> 3
SI TECHNOLOGIES, INC.
Consolidated Statements of Earnings
(Unaudited)
<TABLE>
<CAPTION>
For the three month period ended For the nine month period ended
April 30 April 30
------------------------------ ------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 5,021,993 $ 2,768,838 $ 15,834,167 $ 9,152,174
Cost of sales 2,695,990 1,583,700 8,914,688 5,305,061
Gross profit 2,326,003 1,185,138 6,919,479 3,847,113
Operating expenses:
Selling and general and administrative 1,467,188 826,764 4,095,549 2,609,587
Research, development and engineering 277,511 167,787 795,424 629,544
Amortization of intangibles 77,065 33,223 230,695 99,319
------------ ------------ ------------ ------------
1,821,764 1,027,774 5,121,668 3,338,450
------------ ------------ ------------ ------------
Earnings from operations 504,239 157,364 1,797,811 508,663
Interest expense (177,448) (62,630) (737,236) (175,910)
Other income/(expense), net (2,399) (7,163) (17,381) 20,546
------------ ------------ ------------ ------------
Net earnings before income taxes 324,392 87,571 1,043,194 353,299
Income tax expense (89,860) (23,590) (371,860) (128,907)
------------ ------------ ------------ ------------
Net earnings $ 234,532 $ 63,981 $ 671,334 $ 224,392
============ ============ ============ ============
Net earnings per common share $ 0.09 $ 0.03 $ 0.26 $ 0.09
============ ============ ============ ============
Weighed average shares outstanding 2,637,538 2,547,240 2,578,005 2,547,240
============ ============ ============ ============
Net earnings per common and common
equivalent share, assuming dilution $ 0.08 $ 0.02 $ 0.24 $ 0.08
============ ============ ============ ============
Weighed average common and
common equivalent shares outstanding 2,826,008 2,611,714 2,773,995 2,640,501
============ ============ ============ ============
</TABLE>
See notes to consolidated financial statements
3
<PAGE> 4
SI TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the nine month period ended
April 30
-----------------------------
Increase (Decrease) in Cash 1998 1997
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 671,334 $ 224,392
Adjustments to reconcile net earnings to net cash provided
by (used in) operating activities:
Depreciation and amortization 657,859 370,188
Deferred income taxes 11,155 20,300
Changes in operating assets and liabilities:
Decrease (increase) in trade accounts receivable (1,056,122) 57,889
Increase in inventories (514,397) (7,130)
Decrease in refundable income taxes 702,546 --
Decrease (increase) in other current assets 109,146 (194,676)
Increase (decrease) in trade accounts payable (638,327) 80,060
Decrease in accrued liabilities (366,285) (115,470)
Increase (decrease) in income taxes payable 57,541 (145,695)
----------- -----------
Net cash provided by (used in) operating activities (365,550) 289,858
Cash flows from investing activities:
Increase in other assets (28,227) (20,634)
Purchase of equipment and software development (122,850) (492,428)
----------- -----------
Net cash used in investing activities (151,077) (513,062)
Cash flows from financing activities:
Borrowings on line of credit 352,155 440,041
Repayment of notes payable (3,000,000)
Payments on long term debt (572,159) (259,124)
Proceeds from equity financing 3,686,403 100,000
----------- -----------
Net cash used in financing activities 466,399 280,917
----------- -----------
Net decrease in cash (50,228) 57,713
Cash at beginning of period 155,826 65,267
----------- -----------
Cash at end of period $ 105,598 $ 122,980
=========== ===========
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest $ 659,262 $ 182,815
Income taxes $ 337,000 $ 283,895
Noncash investing and financing activities:
Put option obligations $ -- $ 385,000
</TABLE>
See notes to consolidated financial statements
4
<PAGE> 5
SI TECHNOLOGIES, INC.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1. FINANCIAL STATEMENTS
The unaudited consolidated financial statements of the Company and its
subsidiaries have been prepared by the Company 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. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the entire fiscal year ending July 31, 1998. This form 10-QSB should be read in
conjunction with the Annual Report and form 10-KSB for the year ended July 31,
1997.
NOTE 2. INVENTORIES
Inventories are stated at the lower of cost (on a first-in, first-out basis) or
market and consisted of the following at:
<TABLE>
<CAPTION>
APRIL 30, 1998 JULY 31, 1997
(UNAUDITED)
<S> <C> <C>
Raw Materials $1,907,842 $1,481,995
Work in Progress 781,506 804,035
Finished Goods 1,571,395 1,519,286
---------- ----------
Less allowance for obsolescence 281,030 340,000
---------- ----------
$3,979,713 $3,465,316
========== ==========
</TABLE>
NOTE 3. BASIC NET EARNINGS AND DILUTED NET EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE
Basic net earnings per share and diluted net earnings per share are based on the
following computations.
<TABLE>
<CAPTION>
For the Three Month Period Ended April 30, 1998
-----------------------------------------------
Per Share
Income Shares Amount
------ ------ ------
<S> <C> <C> <C>
Basic Net Earnings per Share
Income available to common shareholders $ 234,532 2,637,538 $ 0.09
Effect of Dilutive Securities
Stock options 188,470
-------
Diluted EPS
Income available to common shareholders plus assumed
conversions $ 234,532 2,826,008 $ 0.08
</TABLE>
<TABLE>
<CAPTION>
For the Three Month Period Ended April 30, 1997
-----------------------------------------------
Per Share
Income Shares Amount
<S> <C> <C> <C>
Basic Net Earnings per Share
Income available to common shareholders $ 63,981 2,547,240 $ 0.03
Effect of Dilutive Securities
Stock options 64,474
---------
Diluted EPS
Income available to common shareholders plus assumed
conversions $ 63,981 2,611,714 $ 0.02
</TABLE>
5
<PAGE> 6
NOTE 3. BASIC NET EARNINGS AND DILUTED NET EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE (CONTINUED)
<TABLE>
<CAPTION>
For the Nine month Period Ended April 30, 1998
-------------------------------------------------------
Per Share
Income Shares Amount
<S> <C> <C> <C>
Basic Net Earnings per Share
Income available to common shareholders $ 671,334 2,578,005 $ 0.26
Effect of Dilutive Securities
Stock options 195,990
---------
Diluted EPS
Income available to common shareholders plus assumed
conversions $ 671,334 2,773,995 $ 0.24
</TABLE>
<TABLE>
<CAPTION>
For the Nine month Period Ended April 30, 1997
-----------------------------------------------------
Per Share
Income Shares Amount
<S> <C> <C> <C>
Basic Net Earnings per Share
Income available to common shareholders $ 224,392 2,547,240 $ 0.09
Effect of Dilutive Securities
Stock options 93,261
---------
Diluted EPS
Income available to common shareholders plus assumed
conversions $ 224,392 2,640,501 $ 0.08
</TABLE>
NOTE 4.
On February 13, 1998 the Company merged, in a pooling of interest merger, with
NV Technology, Inc., a Las Vegas, Nevada corporation engaged in the force
measurement device industry. The effect of the merger was an exchange of all the
outstanding capital stock of NV Technology for 200,000 shares of SI
Technologies, Inc. common stock. Historical 1997 performance has been adjusted
to include the results of NV Technology.
NOTE 5.
On April 30, 1998 the Company completed a private placement which raised, in
gross proceeds, $4,200,000 million in additional equity for the Company via the
sale of common stock and warrants. Participants in the private placement
included institutional investors and the management of SI Technologies, Inc.
The Company sold 168 Units at a price of $25,000 per Unit. Each Unit consisted
of 4,998 shares of common stock, plus warrants to purchase 1,000 shares of
common stock at an exercise price of $8.00 per share. As a result of the
offering, the Company issued 839,664 shares of common stock, along with warrants
to purchase 168,000 shares of common stock in the future. After consummation of
the offering, SI Technologies, Inc. has 3,387,904 common shares outstanding.
The Company has used the Unit proceeds to reduce existing indebtedness incurred
in connection with recent acquisitions.
6
<PAGE> 7
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
SI Technologies, Inc. and Subsidiaries ("SI" or the "Company") is a rapidly
growing designer, manufacturer and marketer of equipment and engineered systems
that enhance the processing, handling, movement and transportation of goods and
materials. The Company's products include dynamic and stationary weighing
systems, load handling and moving systems, measurement devices, instrumentation
and operations information systems. SI products are used throughout the world in
a wide variety of industries, including aerospace, agriculture, automotive,
aviation, construction, forestry, freight transportation, maritime, mining, and
waste management.
In recent years, the Company has been capitalizing on its technology and
existing customer relationships through product and market expansion in the
$30-billion industrial weighing and material handling equipment industry.
Driving SI's business expansion are both an aggressive internal product
development program and the acquisition of businesses with technology and
revenue synergy.
PRODUCTS AND SERVICES
Weighing Systems
SI designs and manufactures dynamic and stationary electronic weighing systems
for use in a wide array of industrial applications. As a result of the
uniqueness of the Company's weighing system products, SI is one of few
manufacturers in the industry who design and manufacture all three of the
primary components of an electronic scale. These components are the load
handling structure, force measurement devices and instrumentation. Many
manufacturers of conventional scale systems manufacture only load handling
structures, outsourcing to standard industry suppliers their force measurement
device and instrumentation requirements. The Company utilizes its expertise and
manufacturing know-how in each of these critical components to competitive
advantage.
Dynamic or mobile weighing systems commonly known as on-board scales are
installed on transportation vehicles and material handling equipment to inform
operators, and record for operations management; gross vehicle, axle group,
payload, and incremental pick-up and delivery weights as the vehicle is loaded
or unloaded. SI systems are available in modular kits for use on all major
original equipment manufacturer (OEM) trucks, trailers, forklifts and loaders.
Products are marketed under the AirScale, RouteMan, SmartPin, Trojan, TruxScale,
and Tuffer trade names to the aggregate, agriculture, construction, forestry,
freight transportation, mining, and waste management industries. These
industries constitute the primary markets for on-board weighing systems as they
often have loads that vary in weight, are difficult to estimate and fleets that
load and unload in locations that are not in close proximity to conventional
in-ground truck scales. The systems are utilized to increase productivity and
reduce operating expense in material handling, loading and transporting
operations. Depending on application, specific economic benefit is derived from
reduced overweight vehicle fines and delays; reduced time loading, checkweighing
and adjusting loads to maximum legal limits; reduced mileage and driving time to
checkweighing locations such as commercial in-ground truck scales; immediate
measurement and recording of pick-up and delivery weights; reduced equipment
abuse, maintenance downtime and expense; and higher capital equipment capacity
utilization.
Load Handling and Moving Systems
Load handling and moving systems manufactured and marketed by the Company
utilize both standard and highly specialized air and water bearing movement
systems to move loads of any weight efficiently and with extreme precision. Air
bearings are air cushion devices that are used to "float" heavy loads on a thin
film of air. Additionally, the Company manufactures systems utilizing water
bearings for use in large outdoor applications where water is used as the
flotation medium rather than air. These products, marketed under the trade names
AeroGo, AeroCaster, AeroPlanks and AeroPallets, are the world leader in
practical and efficient methods of rotation, alignment, transfer, location and
movement of materials and products weighing from several hundred pounds to more
than 6,100 tons.
The Company's load handling and moving product line comprises two distinct
categories. The first is a standard product line of rugged, industrial,
off-the-shelf air cushion devices that allow a single person to easily and
safely move loads weighing from a few hundred pounds to many tons. Standard
products are routinely used to move manufacturing fixtures, printing press bulky
paper rolls, jet engines, and other heavy loads. The other category of the
product line consists of custom-engineered products. Custom-engineered products
and specialized systems designed and manufactured by the Company in recent years
are currently being used to move 100,000-pound dies, launching
7
<PAGE> 8
ships, moving 4,500-ton stadium sections, transporting aerospace booster rockets
and moving large assemblies in and out of assembly line operations in numerous
heavy equipment manufacturing facilities.
RESULTS OF OPERATIONS
Sales
Net sales increased to $5,021,993 for the quarter ended April 30, 1998
from $2,768,838 for the same period last year. This is an increase of
$2,253,155 or 81% from the prior year's third quarter results. Net sales
for the nine month period ending April 30, 1998 were $15,834,167 compared
to $9,152,174 in the same period of fiscal 1997. This is an increase of
$6,681,993 or 73% from the prior year's first nine months.
The increased sales in the quarter are the result of incremental sales
resulting from the inclusion of AeroGo operations which were acquired in
July 1997. Sales in the quarter benefited from continued diversification
in the Company's customer base and sales of an expanded range of product
lines which have greatly diminished the Company's historical reliance on
the forestry and waste markets. The traditional forestry and waste markets
have been reduced to approximately 25% of total sales from a level of
nearly 70% before the diversification created by recent acquisitions.
Gross Profit
Gross profit for the quarter was $2,326,003 compared to $1,185,138 in the
third quarter last year. This is an increase of $1,140,865 or 96% from the
prior year's third quarter results. Gross profit for the nine month period
ending April 30, 1998 was $6,919,479 compared to $3,847,113 in the same
period of fiscal 1997. This is an increase of $3,072,366 or 80% from the
prior year's first nine months.
Gross profit as a percentage of sales was 46% in this year's third quarter
as compared to 43% in last year's third quarter. For the nine month period
ending April 30, 1998 gross profit as a percentage of sales was 44% as
compared to 42% recorded in the first nine months of last year. The
increased gross margin percentage is the result of a different product mix
as compared to last year.
Selling, General and Administrative Expenses
SG & A expenses increased to $1,467,188 for the quarter ended April 30,
1998 from $826,764 for the same period last year. This is an increase of
$640,424 or 77% from the prior year's third quarter. SG & A expense as a
percentage of revenue was 29% in this year's third quarter and 30% in the
third quarter of last year. SG & A expenses for the nine month period
ending April 30, 1998 were $4,095,549 as compared to $2,609,587 in the
same period of fiscal 1997. This is an increase of $1,485,962 or 57%. For
the nine month period of 1998 SG & A expenses were 26% as a percentage of
revenue as compared to 29% during the first nine months of fiscal 1997.
Total SG & A expenses increased due to the inclusion of the AeroGo
operations in the quarter following the July 1997 acquisition. However,
the added level of expense was less than the sales increase, thereby
resulting in a favorable reduction in the ratio of total SG & A expense to
sales.
Research, Development and Engineering Expenses
RD & E expenditures increased to $277,511 for the quarter ended April 30,
1998 from $167,787 for the same period last year. This is an increase of
$109,724 or 65% from the prior year's third quarter. RD & E expenses as a
percentage of revenues remained at 6% between the quarters. RD & E
expenditures were $795,424 for the nine month period ending April 30, 1998
as compared to $629,544 in the same period of 1997. This is an increase of
$165,880 or 26% from the same period of fiscal 1997. For the nine month
period of 1998 RD & E expenditures were 5% of sales as compared to 7% of
sales during the same period of 1997.
While total RD & E investment continues to increase, the lower RD & E
spending ratio to sales reflects a return to a spending rate in line with
industry norms after several years of accelerated investment and the
benefit of combining resources of acquired companies to leverage RD & E
investment across all operations of the Company.
Intangibles
The amortization of intangibles increased to $77,065 for the quarter ended
April 30, 1998 from $33,223 for the same period last year. This is an
increase of $43,842 or 132% from the prior year's third quarter. For the
nine month period ending April 30, 1998, amortization of intangibles was
$230,695 as compared to $99,319 in the same period of last fiscal year.
This is an increase of $131,376 or 132% from the prior year's nine month
period. This increase reflects the amortization of intangibles associated
with the acquisition of AeroGo, Inc. made in July 1997.
8
<PAGE> 9
Interest Expense and Other Income/expense,(net)
Interest expense increased to $177,448 for the quarter ended April 30,
1998 from $62,630 for the same period last year. This is an increase of
$114,818 or 183% from the prior year's third quarter. For the nine month
period ending April 30, 1998 interest expense was $737,236 as compared to
$175,910 in the same period of last fiscal year. This is an increase of
$561,326 or 319% from the prior year's nine month period. The increased
interest expense is the result of the increased debt incurred for the
AeroGo acquisition and from increased working capital needs.
Income Tax Expense
Income tax expense increased to $89,860 for the quarter ended April 30,
1998 from $23,590 for the same period last year. This is an increase of
$66,270 or 281% from the prior year's third quarter. For the nine month
period ended April 30, 1998 income tax expense was $371,860 as compared to
$128,907 in the same period of last year. This is an increase of $242,953
or 188%. The increased expense reflects the higher pretax income recorded
in the current quarter. The effective tax rate for the quarter exceeds the
U.S. federal corporate income tax rate of 34% primarily due to the
amortization of intangible assets which is not deductible for income tax
purposes and due to state income taxes.
INFLATION
Historically, the impact of inflation has been negligible, as the Company has
been able to offset the effects through efficiency and price increases.
LIQUIDITY AND CAPITAL RESOURCES
In July 1997, the Company amended its principal credit agreement with its bank
for the purpose of financing the acquisition of AeroGo, Inc. This agreement
included an increase to the Company's existing line of credit from $2,000,000 to
$4,000,000, a one year note in the amount of $3,000,000 due July 31, 1998 and a
seven year note in the amount of $1,900,000. The amended credit agreement
included a requirement that the Company obtain additional equity financing of no
less than $3,200,000 no later than July 31, 1998. The Company's credit facility
requires the Company to maintain certain levels of working capital,
stockholders' equity and contains other covenants. In April 1998 the Company
completed a private placement of common stock which satisfied the Company's
agreement to obtain additional equity capital. Proceeds from this financing were
used to repay the $3,000,000 one year note and borrowings under the Company's
line of credit.
The Company's line of credit of $4,000,000 continues to be extended as
requested. As of April 30, 1998, the Company had outstanding borrowings of
$2,576,991 under the line of credit which is included in long term debt.
The Company believes cash flow from operations and the funds available under its
bank facility will be sufficient to meet the Company's working capital needs,
anticipated capital expenditures and payments required under its credit
facilities. Future acquisition activity may require additional financing in the
form of debt and/or equity capital.
9
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 2 -- CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) Sales of Unregistered Securities
On February 13th 1998 the Company issued 200,000 shares of common stock
to the shareholders of NV Technology, Inc. The acquisition of NV
Technology, Inc. was consummated pursuant to a merger of a wholly owned
subsidiary of the Company with NV Technology, Inc., pursuant to which the
Company acquired all the outstanding capital stock of NV Technology, Inc.
in exchange for the issuance of 200,000 shares of the Company's common
stock. The Company relied upon the exemption provided by Section 4(2) of
the Securities Act for issuance of the shares. In determining such
exemption was available, the Company reasonably believed, based upon
representations made by the seven shareholders of NV Technology, Inc.
that they were acquiring the shares for investment intent, that they
acknowledged and understood that the resale of the shares was restricted,
that a legend restricting resale of the shares would appear on the stock
certificate, and that they had sufficient experience to evaluate the
transaction and risks associated with acquisition of the Company's common
stock. Each NV Technology, Inc. shareholder received a copy of the
Company's 10-K for the year ended July 31, 1997, the Company's Proxy
Statement for its annual meeting held in January, 1998, and quarterly
reports on form 10Q for the quarter ended October 31, 1997 as well as a
summary of the transaction and copies of material documents.
On April 30, 1998, the Company issued 839,664 shares of Common Stock,
along with Warrants to purchase 168,000 shares of Common Stock for total
consideration of $4.2 million (the "Financing"). The shares and warrants
were issued to two institutional investors and to a director and
executive officer of the Company.
In connection with the Financing, the Company paid commissions to the
Boston Group of $380,000 and issued the Boston Group warrants to purchase
79,768 shares of common stock at an exercise price of $5.50 per share.
The Company relied upon the exemption provided by Rule 506 of Regulation
D in connection with issuance of shares and warrants in the Financing and
to the Boston Group. Each of the investors in the Financing, and the
Boston Group, represented to the Company that they were accredited
investors as defined in Rule 501 of Regulation D, that they were
acquiring the shares and/or warrants for investment intent and not with a
view to distribution. Each investor and the Boston Group represented that
they were acquiring the securities for themselves and not for other
persons and acknowledged that they had been advised in writing that
securities were not registered under the Securities Act and could not be
resold unless registered under the Act or an exemption was available. The
certificates representing the shares and warrants issued in connection
with the Financing and to the Boston Group contained a legend setting
forth restrictions on transferability and resale of the securities.
The warrants issued in the Financing have an exercise price of $8.00 per
share and expire, to the extent not exercised, on April 29, 2000. The
Company has the right to redeem for $0.01 per warrant all of or any
portion of the outstanding warrants at any time after April 30, 1999, if
(i) the Company has filed a registration statement registering the shares
issuable upon exercise of the warrant for resale, (ii) such registration
statement has been effective during the 90 day period immediately
preceding the date that the Company notifies the warrantholder of its
intent to redeem the warrants (the "Notice Date") and (iii) the closing
bid of the Company's common stock for each of the 20 consecutive business
days ending on a date no earlier than five days prior to the Notice Date
is at least $10.00 per share.
The warrants issued to the Boston Group in connection with the Financing
are exercisable for a five-year period. The exercise price of such
warrants is $5.50 per share.
10
<PAGE> 11
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits to Part II
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K dated February 13,
1998 announcing the merger of NV Technology, Inc. with the Company
and containing the containing the related acquisition agreement and
plan of merger and unaudited pro forma financial information.
The Company filed a Current Report on Form 8-K dated May 11, 1998
announcing the completion of a private placement which raised, in
gross proceeds, $4,200,000 million in additional equity for the
Company via the sale of common stock and warrants.
The items omitted are either inapplicable or are items to which the answer is
negative.
11
<PAGE> 12
SI TECHNOLOGIES, INC.
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.
SI TECHNOLOGIES, INC.
June 12, 1998 /s/ RICK A. BEETS
------------------------------------------------
Rick A. Beets
President, CEO
(Principal Executive Officer)
/s/ PAUL V. CAVANAUGH
------------------------------------------------
Paul V. Cavanaugh
Vice President, CFO
(Principal Financial and Accounting Officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-START> AUG-01-1998
<PERIOD-END> APR-30-1998
<CASH> 105,598
<SECURITIES> 0
<RECEIVABLES> 4,025,974
<ALLOWANCES> 148,398
<INVENTORY> 3,979,713
<CURRENT-ASSETS> 8,554,940
<PP&E> 1,233,588
<DEPRECIATION> 2,062,739
<TOTAL-ASSETS> 17,809,338
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0
0
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</TABLE>
