<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
July 14, 1997
---------------------------------
Date of Report
(Date of Earliest Event Reported)
TOPRO, INC.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Colorado 0-19167 84-1042227
- ------------------------------- ----------- ----------------
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File No.) I.D. Number)
2525 West Evans Avenue, Denver, Colorado 80219
- ---------------------------------------- ----------
(Address of principal executive offices) (zip code)
(303) 935-1221
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS.
On June 26, 1997 Topro, Inc. (with its subsidiaries MDCS, Inc., Advanced Control
Technologies, Inc., Vision Engineering, Inc. and All Control Systems, Inc. d/b/a
TAVA Technologies, Inc.) announced a new business initiative based on its new
product PlantY2K One-TM-, a proprietary package of product and services designed
to address year 2000 compliance problems in process control and factory floor
automation systems. In response to many requests from stock analysts,
shareholders, and other members of the investment community for additional
information, the Company is making public the following additional information
concerning this development.
MANAGEMENT'S PERSPECTIVE ON YEAR 2000 (Y2K) PROBLEMS ON THE FACTORY FLOOR:
The industrial community has been slow to recognize the reality of Y2K problems
on their factory floors. The typical view has been: process control information
is real-time, so why worry about a date stamp issue? While roughly accurate in
concept, this view is clearly wrong in practice. The tide however is beginning
to change.
- - The Director of Industrial Automation Systems at Rockwell Automation
acknowledged in a meeting with TAVA representatives that the Y2K problem at
the factory level is "huge."
- - TAVA has been advised by Unilever representatives that Unilever has
mandated that their 500 manufacturing operations certify to corporate
office that they are year 2000 compliant by October 1997.
- - TAVA has been advised by Coca-Cola, Inc. representatives that Coca-Cola has
appointed a corporate director of Y2K factory floor compliance.
Most plant floor systems are complex combinations of hardware and software from
a variety of vendors. Tava Technologies management has found that many of these
components have some sort of compliance issue. Further, a compliance problem
with a single component and the corresponding solution must be considered in the
context of the impact on the total system, which means that a control system
integrator is the logical choice to effect the required comprehensive solutions.
OEM hardware and software suppliers do not have the staff or complete system
expertise available to address these issues.
PlantY2K One-TM- is a full service offering that includes impact assessment,
analysis, code conversion, implementation and testing. The Company employs
highly structured methodologies in all phases and includes well-accepted joint
application development techniques in the conversion and implementation phases.
- - The first step in assessment is to inventory the customer's hardware and
software applications and network and review that "inventory" against our
constantly updated
2
<PAGE>
data base for known year 2000 compliance problems.
- - The second step is to map the customer's system use of time-date
information and or the interaction of components known to have a compliance
problem. The "deliverable" from this phase is a preliminary diagnosis of
the scope of the customer's problem and a proposal for a corrective action
plan. The estimated average pricing for the assessment phase alone is
$10,000.
- - At this point a remediation program is negotiated with the customer, or the
customer determines that the cost of remediation exceeds a complete system
replacement. As an example, at Sun Oil, management has taken steps toward
installing a new batch control system and is working to develop a
functional specification for a new system with an estimated cost of
$300,000. Although TAVA is working with Sun Oil to develop a functional
specification and will be offered the opportunity to submit a proposal, it
is not certain that TAVA will be selected as the provider.
- - The remediation undertaking includes detailed system analysis, test of year
2000 compliance interaction, and "fix" of the non-compliant features and
further testing. Most hardware and software suppliers have discrete
component correction packages available. TAVA personnel install/implement
those packages, re-program system interaction to accommodate these changes
safely and effectively, and revise the balance of the system code as
required.
- - Special remediation solutions are catalogued in the TAVA Plant Y2K One-TM-
database so as to be available for subsequent application.
TAVA is already engaged in year 2000 projects with Coca-Cola Enterprises, Sun
Oil and Dupont-Merck.
The potential opportunity for TAVA is very, very large. The company has sent a
5000 piece mailer out to its own customer base. The Company's intent is both to
use PlantY2K One-TM- as a high margin revenue producer and to secure penetration
at new accounts. A promotional campaign is being designed to take the product
beyond the Company's existing customer base.
Recognizing that the Company has a resource base that can only address a portion
of the total demand, PlantY2K One-TM- has been designed to allow potential
license use to customers and other third party system integrators. We have
reviewed the efforts of some of the MIS level Y2K solution providers and modeled
our program on theirs. Some of the more successful MIS level players have taken
exactly this approach of licensing their methodology and data base access.
From a competitive view, MIS level Y2K solution providers are potential
partners, not competitors. Their product and personnel are not focused on the
peculiar requirements of
3
<PAGE>
the factory floor equipment and systems.
At the same time, OEM suppliers of factory automation hardware and software such
as Rockwell and Wonderware are not staffed to address the problem and definitely
want to avoid stepping into a "system" issue simply because they supplied a
single component therein. Management has had this direct feedback from a number
of OEMs.
The Company is in the process of developing a specific business plan to address
completely the year 2000 opportunity.
Statements made in this Current Report on Form 8-K that are not historical facts
may be forward looking statements. Actual events may differ materially from
those projected in any forward looking statement. There are a number of
important factors beyond the control of the Company, that could cause actual
events to differ materially from those anticipated by any forward looking
information. With regard to PlantY2K One-TM-, these factors include the
Company's ability to hire additional personnel on a timely basis to meet
customer demand, the failure of industry participants and potential customers
to recognize, and promptly dedicate resources to, the Y2K problem, and the
possibility that others may offer competitive products and services. A
description of risks and uncertainties generally attendant to Topro and its
industry and other factors which could affect the Company's financial results
are included in the Company's Form 10-KSB for the fiscal year ended June 30,
1996, and in its subsequent Securities and Exchange Commission filings.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Topro, Inc.
Date: July 14, 1997 By: /s/ John Jenkins
------------- ------------------------------
John Jenkins
President and CEO
4
