<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Quarterly Period Ended February 28, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the Transition Period From ____ to ____
Commission file number 0-27928
NICOLLET PROCESS ENGINEERING, INC.
(Exact name of small business issuer as specified in its charter)
Minnesota 41-1528120
- --------------------------------------------- ---------------------------------
(State or other jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
420 North Fifth Street, Ford Centre, Suite 1040
Minneapolis, MN 55401
-------------------------------------------------
(Address of principal executive offices)
(612) 339-7958
---------------------------------
(Issuer's telephone number)
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 past 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 [ ]
The number of shares of common stock, no par value, outstanding as of March 24,
1997 was 3,346,305.
Transitional Small Business Disclosure Format (Check One): YES [ ] NO [X]
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NICOLLET PROCESS ENGINEERING, INC.
Balance Sheets
February 28, 1997 (Unaudited) and August 31, 1996
February 28, August 31,
ASSETS 1997 1996
- ------ ------------ -----------
(unaudited) (Note)
Current Assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . $ 617,046 $1,198,399
Short term investments . . . . . . . . . . . . . . . -- 973,224
Net receivables. . . . . . . . . . . . . . . . . . . 554,592 284,197
Inventories. . . . . . . . . . . . . . . . . . . . . 217,659 332,074
Prepaid expenses and other assets. . . . . . . . . . 50,454 23,655
------------ -----------
Total current assets . . . . . . . . . . . . . . . 1,439,751 2,811,549
Property and equipment:
Computer equipment . . . . . . . . . . . . . . . . . 458,601 412,274
Furnishings and equipment. . . . . . . . . . . . . . 122,782 121,752
Leasehold improvements . . . . . . . . . . . . . . . 70,211 70,211
------------ -----------
651,594 604,237
Less: accumulated depreciation. . . . . . . . . . . (331,958) (289,619)
------------ -----------
319,636 314,618
Other assets:
License agreement. . . . . . . . . . . . . . . . . . 71,784 94,453
Software development costs . . . . . . . . . . . . . 298,473 305,384
Other assets . . . . . . . . . . . . . . . . . . . . 18,184 53,131
Capital projects in process. . . . . . . . . . . . . 328,586 --
------------ -----------
Total assets . . . . . . . . . . . . . . . . . . . . . $2,476,414 $3,579,135
------------ -----------
------------ -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Customer deposits. . . . . . . . . . . . . . . . . . $ 21,452 --
Notes payable -- current portion . . . . . . . . . . 49,655 $ 49,655
Accounts payable . . . . . . . . . . . . . . . . . . 204,141 268,332
Accrued payroll liabilities. . . . . . . . . . . . . 9,136 29,292
Current portion of capitalized lease obligation. . . 5,343 5,343
Accrued liabilities. . . . . . . . . . . . . . . . . 3,535 136,778
--------- ---------
Total current liabilities. . . . . . . . . . . . . 293,262 489,400
Long term notes. . . . . . . . . . . . . . . . . . . . 47,564 73,056
Capitalized lease obligation . . . . . . . . . . . . . 4,914 7,802
Deferred rent. . . . . . . . . . . . . . . . . . . . . 9,701 12,793
Stockholders' equity (deficit):
Common stock, no par value:
Authorized shares -- 5,000,000;
issued and outstanding
shares 3,272,923 at August 31, 1996
and 3,346,305 at February 28, 1997 . . . . . . . 7,616,667 7,675,841
Accumulated deficit. . . . . . . . . . . . . . . . . (5,494,194) (4,675,257)
---------- ----------
2,122,473 3,000,584
Less stock subscriptions receivable. . . . . . . . . (1,500) (4,500)
---------- ----------
Total stockholders' equity (deficit) . . . . . . . . . 2,120,973 2,996,084
---------- ----------
Total liabilities and stockholders' equity . . . . . . $2,476,414 $3,579,135
---------- ----------
---------- ----------
Note: The balance sheet as of August 31, 1996 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles.
See accompanying notes to financial statements.
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NICOLLET PROCESS ENGINEERING, INC.
Statements of Operations
For the Three Months and Six Months Ended
February 28, 1997 and February 29, 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
February 28, February 29, February 28, February 29,
------------ ------------ ------------ ------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales. . . . . . . . . . . . . . . $520,936 $506,412 $1,114,654 $1,474,361
Cost of sales. . . . . . . . . . . . . 349,954 441,442 686,629 1,101,356
-------- -------- ---------- ----------
Gross Margin . . . . . . . . . . . . . 170,982 64,970 428,025 373,005
Operating expenses:
Selling expenses . . . . . . . . . 312,611 175,797 630,016 375,788
Research and development
expenses. . . . . . . . . . . . . 102,827 79,810 220,361 157,071
General and administrative
expenses. . . . . . . . . . . . . 216,602 163,420 431,018 315,803
------- ------- ------- -------
Total operating expenses . . . . 632,040 419,027 1,281,395 848,662
------- ------- --------- -------
Operating loss . . . . . . . . . . . . (461,056) (354,057) (853,370) (475,657)
Other income/expenses
Interest expense . . . . . . . . . 2,318 39,832 4,281 60,404
Interest income. . . . . . . . . . (14,502) 0 (38,701) 0
------ ------ ------ ------
Total other
income/expenses . . . . . . . . (12,184) 39,832 (34,420) 60,404
------ ------ ------ ------
Net loss . . . . . . . . . . . . . . . $(448,874) $(393,889) $(818,950) $(536,061)
--------- ------- ------- -------
Net loss per share . . . . . . . . . . $(0.14) $(0.19) $(0.25) $(0.25)
---- ---- ---- ----
Weighted average number of
shares outstanding . . . . . . . . 3,317,008 2,112,369 3,317,008 2,112,369
--------- --------- --------- ----------
--------- --------- --------- ----------
</TABLE>
See accompanying notes to financial statements.
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NICOLLET PROCESS ENGINEERING, INC.
Statements of Cash Flows
For the Six Months Ended February 28, 1997 and February 29, 1996
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
----------------
February 28, 1997 February 29, 1996
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . $(818,950) $(536,061)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation/amortization. . . . . . . . . . . . . . . 124,065 30,600
Accounts receivable. . . . . . . . . . . . . . . . . (270,395) 28,667
Inventories. . . . . . . . . . . . . . . . . . . . . 114,426 62,376
Prepaid expenses . . . . . . . . . . . . . . . . . . (26,800) (45,318)
Accounts payable . . . . . . . . . . . . . . . . . . (64,191) (157,252)
Other current liabilities. . . . . . . . . . . . . . 34,554 287,073
Accrued liabilities. . . . . . . . . . . . . . . . . (116,845) (95,782)
---------- --------
Net cash used in operating activities. . . . . . . . . . . (1,024,136) (425,697)
CASH FLOWS FROM INVESTING ACTIVITIES
Total fixed assets . . . . . . . . . . . . . . . . . . . . (47,357) (13,571)
Other assets . . . . . . . . . . . . . . . . . . . . . . . (48,322) (136,984)
Capital-in-process . . . . . . . . . . . . . . . . . . . . (297,463) (10,079)
---------- --------
Net cash used in investing activities. . . . . . . . . . . (393,142) (160,634)
CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES
Proceeds from:
Common stock . . . . . . . . . . . . . . . . . . . . . . (59,174) 756,363
Stock subscription received. . . . . . . . . . . . . . . 3,000 --
Notes payable. . . . . . . . . . . . . . . . . . . . . . (75,147) --
Deferred lease obligation. . . . . . . . . . . . . . . . (3,092) (3,198)
Capitalized lease obligation . . . . . . . . . . . . . . (2,888) (2,443)
---------- --------
Net cash (used in)/from financing activities . . . . . . . (137,301) 750,722
---------- --------
Net decrease in cash . . . . . . . . . . . . . . . . . . . (1,554,578) 164,391
Cash at beginning of period. . . . . . . . . . . . . . . . $(2,171,623) $ (5,274)
---------- --------
Cash at end of period. . . . . . . . . . . . . . . . . . . 617,046 169,665
---------- --------
---------- --------
</TABLE>
See accompanying notes to financial statements.
4
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NICOLLET PROCESS ENGINEERING, INC.
Form 10-QSB
February 28, 1997
Notes to Financial Statements
1. BASIS OF PRESENTATION
The unaudited interim financial statements have been prepared by the
Company in accordance with generally accepted accounting principles,
pursuant to the rules and regulations of the Securities and Exchange
Commission. Accordingly, certain information and footnote disclosures
normally included in financial statements have been omitted or condensed
pursuant to such rules and regulations. The information furnished
reflects, in the opinion of the management of the Company, all adjustments
(of only a normally recurring nature) necessary to present a fair statement
of the results for the interim periods presented. Operating results for
the three and six month periods ended February 28, 1997 are not necessarily
indicative of the results that may be expected for the year ended August
31, 1997. The accompanying unaudited interim financial statements should
be read in conjunction with the financial statements and related notes
included in the Company's Annual Report on Form 10-KSB dated August 31,
1996.
2. NET INCOME (LOSS) PER SHARE
Net income (loss) per share is computed by dividing the net income (loss)
for the period by the weighted average number of shares of common stock
outstanding during the period.
3. INITIAL PUBLIC OFFERING
On March 19, 1996, the Company completed an initial public offering of
1,000,000 shares of newly issued common stock which raised $3,639,000 net
of expenses. On May 6, 1996, the overallotment was exercised for 171,215
additional shares which raised $688,000. The price per share was $4.625.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS.
THIS FORM 10-QSB CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS. FOR THIS
PURPOSE, ANY STATEMENTS CONTAINED IN THIS FORM 10-QSB THAT ARE NOT STATEMENTS OF
HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT
LIMITING THE FOREGOING, WORDS SUCH AS "MAY," "WILL," "EXPECT," "BELIEVE,"
"ANTICIPATE," "ESTIMATE" OR "CONTINUE" OR THE NEGATIVE OR OTHER VARIATIONS
THEREOF OR COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS. THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL RISKS AND
UNCERTAINTIES, AND ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON A VARIETY
OF FACTORS, INCLUDING THOSE DESCRIBED UNDER THE CAPTION "IMPORTANT FACTORS TO
CONSIDER" CONTAINED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL
YEAR ENDING AUGUST 31, 1996.
OVERVIEW
Nicollet Process Engineering, Inc. (the "Company") designs, manufacturers,
markets and supports process monitoring and control systems, client/server
software at the host level and machine diagnostic tools for the die casting and
plastic injection molding industries. The Company has developed
industry-specific, "turn-key" manufacturing information and process control
systems (the "NPE Monitoring and Control System") which, on a real-time basis,
monitor, collect and display machine performance data, monitor process
performance continuously against pre-set values, provide feedback to the
machine's controller to bring out-of-tolerance performance back into
conformance, and aggregate data for real-time presentation of process reports
for use by the machine operator. The Company has also developed client/server
software at the host level (the "NPE Host Level Software") which provides access
to factory floor data stored in file servers and distributes that data, on a
real-time basis, to all levels of an organization in either preprogrammed report
formats or on a user defined basis. These products (together the "NPE System")
allow manufacturers of discrete parts to (i) analyze and control their
production processes to ensure repeatable production of high quality parts; (ii)
reduce scrap and machine downtime; (iii) increase product quality; (iv) reduce
production costs; and (v) provide management on-line, real-time access to
productions and process data for decision making. The Company's third product
line, the Machine Capability Analyzer (the "MCA"), is a portable,
troubleshooting instrument that tests the functioning of a manufacturing machine
for inconsistencies in operation.
Since inception, NPE's strategy has been to develop industry-specific
monitoring and control systems to better control the production process and
to provide information access to all levels of management throughout an
enterprise. In 1985, the Company began developing its first product, a
process monitoring and control system for the die casting industry, and
ultimately generated its first sale in 1987. In 1988, the Company introduced
an early version of its networking and host level software product. This
product, made for the die casting industry, connected various machines on the
factory floor and provided information from those machines to the host level.
After introduction of the Company's hardware and software products into the
die casting industry, the Company began exploring expansion into other
industries and began development work for products in the plastic injection
molding industry. In 1994, the Company introduced Windows-TM- based versions
of its products for the plastic injection molding industry. These products
have both on-machine process and control capabilities and plant-wide data
acquisition and dissemination capabilities. During 1995, the Company
introduced Windows-TM- based versions of its products into the die casting
industry. In 1995, the Company also developed its client/server software
product for the plastic injection molding industry. The first sale of the
host-level product occurred in late 1995. In the second quarter of the
Company's fiscal year ending August 31, 1997, the Company completed
development of the Windows-TM- 3.0 version for the plastics systems. The
emphasis of existing sales efforts of the Company's products are the
Windows-TM- based versions, although the Company continues to offer DOS based
products.
Revenues are generated from the sale of the Company's NPE System and the
sale of the MCA. Revenues for these products generally are recognized upon
shipment to the customer. The Company also
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separately charges for installation, training, service and support. Revenues
related to installation and training are recognized as the services are
performed. The Company also offers a one year warranty on certain components of
its products. The warranty on any purchased hardware is provided by the
original hardware vendor.
The Company expenses all software development costs as incurred until
technological feasibility has been established for the product, at which time
the costs are capitalized until the product is available for general release to
customers. The cost of purchased software is capitalized if the software meets
the technological feasibility requirements. During fiscal 1994, 1995 and 1996,
the Company has expensed substantially all software development costs. In August
1995, the Company acquired the core technology for its Windows-TM- based
software for the die casting industry. The Company capitalized the cost of this
purchased software as of August 31, 1995 because the software met the
technological feasibility requirements at the time of purchase. The Company also
capitalized software development costs for the first two quarters of 1997
relating to development of the NPE Host Level Software for the die casting
industry and a portion of version 3.0 of the plastics NPE Monitoring and Control
System.
RESULTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDING FEBRUARY 28, 1997
COMPARED TO THREE MONTHS AND SIX MONTHS ENDING FEBRUARY 29, 1996
NET SALES. Net sales increased 3% to approximately $521,000 in the three
months ended February 28, 1997, compared to approximately $506,000 in the three
months ended February 29, 1996. Net sales decreased 24% to approximately $1.1
million in the six months ended February 28, 1997, compared to approximately
$1.5 in the six months ended February 29, 1996. The increase in the net sales
for the second quarter of fiscal 1997 was due to increased sales for the MCA.
The decrease in net sales for the six month period ending February 28, 1997 was
due to lower sales of the plastics NPE Monitoring and Control System
attributable to the delay in launching the new version 3.0 Windows-TM- product
and lower sales of MCAs, partially offset by an increase in die casting sales of
the NPE System.
Sales of the Company's die casting NPE System in the three months ending
February 28, 1997 decreased approximately 3% to approximately $179,000. Sales
of the Company's die casting NPE System in the six months ending February 28,
1997 increased approximately 4% to approximately $541,000. The increase for the
six month period ending February 28, 1997 was due to increased selling efforts
of the new Windows-TM- version of the NPE Monitoring and Control System which
was released last fall and an increase in the Company's customer base.
Sales of the plastics version of the NPE Monitoring and Control System
decreased 31% to approximately $114,000 in the three months ending February 28,
1997, compared to approximately $165,000 in the prior year period. Sales of the
plastics version of the NPE Monitoring and Control System decreased 78% to
approximately $117,000 in the six months ending February 28, 1997, compared to
approximately $545,000 in the prior year period. The decrease for both the
three month and six month periods ending February 28, 1997 was due primarily to
an unusually large shipment to a single customer in the prior year. In
addition, the Company experienced a delay in the release of version 3.0 of the
plastics version of the NPE Monitoring and Control System in the second quarter
of fiscal 1997. Version 3.0 of the NPE Monitoring and Control System for the
plastics industry was released in the second quarter of fiscal 1997.
Sales of the MCAs increased 73% to $149,000 in the three months ending
February 28, 1997, compared to approximately $86,000 in the prior year period.
Sales of MCAs decreased 5% to $275,000 in the six months ending February 28,
1997, compared to approximately $285,000 in the prior year
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period. The increase in the three months ending February 28, 1997 was due to
increased tele-marketing efforts.
GROSS MARGINS. The gross margin increased to 33% of revenues in the three
months ending February 28, 1997, compared to 13% of revenues in the prior year
period. The gross margin increased to 38% of revenues in the six months ending
February 28, 1997, compared to 25% of revenues in the prior year period. The
increase in both the three month and six month period ending February 28, 1997
was due to cost reduction programs for the Company's die casting products and a
new pricing structure, initiated in the customer service and support center.
The Company now separately charges for service and support.
SALES AND MARKETING EXPENSES. Sales and marketing expenses increased 78% to
approximately $313,000 in the three months ended February 28, 1997, compared to
approximately $176,000 in the prior year period. Sales and marketing expenses
increased 68% to approximately $630,000 in the six months ended February 28,
1997, compared to approximately $376,000 in the prior year period. This
increase in both the three months and six months ending February 28, 1997 was
due to additions to the sales force during the third and fourth quarters of
fiscal 1996 and restructuring of the sales and customer service divisions.
Commission expenses for the six months ended February 28, 1997 were lower due to
the low sales volume, but were offset by trade show expenses, marketing and
travel.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased 29% to approximately $103,000 in the three months ended February 28,
1997, compared to approximately $80,000 in the prior year period. Research and
development expenses increased 40% to approximately $220,000 in the six months
ended February 28, 1997, compared to approximately $157,000 in the prior year
period. This increase, in both the three month and six month periods ending
February 28, 1997, was due to additions to the technical staff during the second
quarter of 1997. The Company capitalized approximately $296,000 in software
development costs relating to development of the NPE Host Level Software for the
die casting industry and certain portions of version 3.0 of the plastics NPE
Monitoring and Control System.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased 33% to approximately $217,000 in the three months ended February 28,
1997, compared to approximately $163,000 in the prior year. General and
administrative expenses increased 14% to approximately $431,000 in the six
months ended February 28, 1997, compared to approximately $316,000 in the prior
year. This increase, in both the three month and six month period ending
February 28, 1997, was due to an increase in legal and accounting fees relating
to the Company's public company obligations, and an increase in amortization
expense.
INTEREST INCOME. Interest income increased to approximately $15,000 in the
three months ended February 28, 1997 and approximately $39,000 for the six
months ended February 28, 1997, compared to zero in the prior year periods.
This increase, in both the three months and six months ending February 28, 1997,
was due to earnings from investments on funds from the initial public offering
("IPO") the Company completed on March 19, 1996.
INTEREST EXPENSES. Interest expenses decreased to approximately $2,300 in
the three months ended February 28, 1997, compared to approximately $40,000 in
the prior year period. Interest expenses decreased to approximately $4,300 in
the six months ended February 28, 1997, compared to approximately $60,000 in the
prior year period. This decrease, in both the three months and six months
ending February 28, 1997, was due to a reduction in outstanding debt as a result
of the payoff of all outstanding loans and obligations from the proceeds of the
IPO.
NET LOSS. The net loss for the three months ended February 28, 1997 was
approximately $449,000 or $0.14 per share, compared to a net loss of
approximately $394,000 or $0.19 per share for the
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three months ended February 29, 1996. The net loss for the six months ended
February 28, 1997 was approximately $819,000 or $.25 per share, compared to a
net loss of approximately $536,000 or $.25 per share for the six months ended
February 29, 1996. The increase in the net loss, in both the three months and
six months ending February 28, 1997, is due primarily to a reduction in net
sales and increased sales and marketing expenses.
LIQUIDITY AND CAPITAL RESOURCES
In March 1996, the Company completed an initial public offering of
1,000,000 shares of common stock. In May 1996, the underwriter exercised its
overallotment option to purchase an additional 171,215 shares of common stock.
The net proceeds to the Company from the public offering was approximately $4.3
million. The Company's common stock is quoted on the Nasdaq SmallCap Market
under the symbol "NPET."
Net cash used in operating activities was approximately $1.0 million and
$426,000 in the six months ended February 28, 1997 and February 29, 1996,
respectively. The cash used was primarily related to operations.
Net cash used in investing activities was approximately $393,000 and
$161,000 in the six months ended February 28, 1997 and February 29, 1996,
respectively.
Net cash used by financing activities was approximately $137,000 in the
six months ended February 28, 1997, and net cash provided by financing
activities was approximately $751,000 in the six months ended February 29,
1996. The net cash used by financing activities in the six months ended
February 28, 1997 was primarily the result of the exercise of a put option
for $60,000 by an optionholder of the Company.
The Company anticipates capital expenditures of approximately $70,000
through the end of fiscal 1997 for use in purchasing engineering test facility
equipment, trade show and booth equipment, production equipment and a
training and demo presentation facility.
Cash, cash equivalents and investments at February 28, 1997 were
approximately $617,000. Management believes this cash, cash equivalents and
investments along with cash generated from operations will be sufficient to
fund operations through June 30, 1997. The Company continues to explore
financing alternatives to meet its future capital requirements. However,
additional financing may not be available when needed or, if available, may
not be on terms that are favorable to the Company or its Shareholders.
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PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal, governmental, administrative or
other proceedings to which the Company is a party or of which any of its
property is the subject.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
An annual meeting of the shareholders of the Company was held on
January 21, 1997. The meeting involved the election of directors, and Pierce A.
McNally, Robert A. Pitner, Richard W. Koontz, Thomas W. Bugbee and Benton J.
Case, Jr. were elected to serve as directors until the next Annual Meeting of
Shareholders, or until their respective successors are elected and qualified.
The votes cast For and Against, with respect to each nominee, were as follows:
Number of Votes
---------------------------------
Director For Against
-------- --------- -------
Pierce A. McNally 2,677,144 51,847
Robert A. Pitner 2,691,382 37,609
Richard W. Koontz 2,694,405 34,586
Thomas W. Bugbee 2,693,905 35,086
Benton J. Case, Jr. 2,691,705 37,286
The shareholders also considered and acted upon proposals (a) to amend
the Company's Articles of Incorporation to increase the number of authorized
shares of capital stock from 5,000,000 shares to 15,000,000 shares, 12,000,000
shares of common stock, no par value and 3,000,000 shares of preferred stock,
undesignated as to series (the "Authorized Shares Proposal") and (b) to ratify
the appointment of Ernst & Young, LLP, certified public accountants, as
independent auditors for the Company for the year ending August 31, 1997 (the
"Auditors Proposal"). The Authorized Shares Proposal was approved, with
1,949,899 votes (or approximately 95.40% of the shares of Common Stock
represented at the meeting) cast For the proposal, 79,040 shares cast Against,
14,884 shares Abstaining and 685,168 Broker Non-Votes. The Auditors Proposal
also was approved, with 2,706,841 votes (or approximately 99.19% of the shares
of Common Stock represented at the meeting) cast For the proposal, 20,900 shares
cast Against, 1,250 shares Abstaining and zero Broker Non-Votes.
ITEM 5. OTHER INFORMATION.
None.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit 3.1 Articles of Incorporation, as amended.
(b) Exhibit 27.1 Financial Data Schedule
(c) No reports were filed on Form 8-K during the quarter for which
this report was filed.
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SIGNATURES
In accordance with 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.
NICOLLET PROCESS ENGINEERING, INC.
Dated: April 11, 1997 By: /s/ Robert A. Pitner
---------------------------------------
Robert A. Pitner
President and Chief Executive Officer
By: /s/ Lanny I. Kurysh
---------------------------------------
Lanny I. Kurysh
Chief Financial and Operating Officer
(principal financial officer)
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EXHIBIT INDEX
Exhibit No. Description Location
- ----------- ----------- --------
3.1 Articles of Incorporation, as Amended...... filed electronically
27.1 Financial Data Schedule.................... filed electronically
13
<PAGE>
ARTICLES OF INCORPORATION
OF
NICOLLET PROCESS ENGINEERING, INC.
The undersigned incorporator, a natural person 18 years of age or older, in
order to form a corporation under Minnesota Statutes, Section 302A, hereby
adopts the following Articles of Incorporation:
ARTICLE I
The name of this corporation is Nicollet Process Engineering, Inc.
ARTICLE II
The registered office of this corporation is located at 420 N. 5th Street,
Suite 1040, Minneapolis, Minnesota 55401. [As amended and filed with the
Secretary of State of the State of Minnesota on April 3, 1990]
ARTICLE III
The aggregate number of shares of stock which the Corporation is authorized
to issue is fifteen million (15,000,000) shares, twelve million (12,000,000)
shares of common stock, no par value (hereinafter referred to as "Common Stock")
and three million (3,000,000) of which shall be designated preferred stock, no
par value (hereinafter referred to as "Preferred Stock"). Shares of Preferred
Stock of the Corporation may be issued from time to time in one or more series,
each of which series shall have such distinctive designation or title and such
number of shares as shall be fixed by the Board of Directors prior to the
issuance of any shares thereof. Each such series of Preferred Stock shall have
such voting powers full or limited, or no voting powers, and such preferences
and relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions providing for the issue of such
series of Preferred Stock as may be adopted from time to time by the Board of
Directors prior to the issuance of any shares thereof pursuant to the authority
hereby expressly vested in it. The Board of Directors is further authorized to
increase or decrease (but not below the number of shares then outstanding) the
number of shares of any series of Preferred Stock subsequent to the issuance of
shares of that series. In case the number of shares of any series shall be so
decreased, the shares constituting such decrease shall resume the status which
they had prior to the adoption of the resolution originally fixing the number of
shares of such series. Except as provided in the resolution or resolutions of
the Board of Directors creating any series of Preferred Stock, the shares of
Common Stock shall have the exclusive right to vote for the election and removal
of directors and for all other purposes. Each holder of Common Stock shall be
entitled to one vote for each share held. [As amended and filed with the
Secretary of State of the State of Minnesota on January 22, 1997]
<PAGE>
ARTICLE IV
The name and address of the incorporator is James P. Martineau, Lindquist &
Vennum, 4200 IDS Center, 80 South Eighth Street, Minneapolis, Minnesota 55402.
ARTICLE V
No shareholder of this corporation shall have any cumulative voting rights.
ARTICLE VI
No shareholder of this corporation shall have any preemptive rights to
subscribe for, purchase, or acquire any shares of the corporation of any class,
whether unissued or now or hereafter authorized, or any obligations or other
securities convertible into or exchangeable for any such shares.
ARTICLE VII
The affirmative vote of the holders of a majority of the voting power of
the shares represented and voting at a duly held meeting of the shareholders of
this corporation is required for an action of the shareholders, except where
Minnesota Statutes, Section 302A requires the affirmative vote of a majority of
the voting power of all voting shares.
ARTICLE VIII
The number of directors of this corporation shall be fixed in the manner
provided in the bylaws.
ARTICLE IX
Any action required or permitted to be taken at a meeting of the board of
directors of this corporation not needing approval by the shareholders under
Minnesota Statutes, Section 302A, may be taken by written action signed by the
number of directors that would be required to take such action at a meeting of
the board of directors at which all directors were present.
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of February,
1985.
/s/ James P. Martineau
-------------------------
James P. Martineau
STATE OF MINNESOTA )
)
COUNTY OF HENNEPIN )
On this 21st day of February, 1985, personally appeared before me James P.
Martineau, to me known to be the person described in and who executed the
foregoing Articles of Incorporation, and he acknowledged that he was a person of
full age and that he executed the foregoing Articles of Incorporation for the
uses and purposes therein expressed.
/s/ Elizabeth A. Martin
-------------------------
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<PAGE>
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<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<CASH> (53,267)
<SECURITIES> 670,313
<RECEIVABLES> 570,790
<ALLOWANCES> 31,490
<INVENTORY> 217,659
<CURRENT-ASSETS> 1,439,750
<PP&E> 668,461
<DEPRECIATION> 331,957
<TOTAL-ASSETS> 2,476,414
<CURRENT-LIABILITIES> 287,920
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0
0
<COMMON> 7,616,667
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<TOTAL-LIABILITY-AND-EQUITY> 2,476,414
<SALES> 1,114,654
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<CGS> 686,629
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