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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------
Date of Report (Date of earliest event reported): November 12, 1999
-------------------
NICOLLET PROCESS ENGINEERING, INC.
(Exact name of registrant as specified in its charter)
Minnesota 0-27928 41-1528120
(State of or other juris- (Commission (I.R.S. Employer
diction of incorporation) File Number) Identification No.)
2665 South Bayshore Drive
Suite PH2B
Coconut Grove, FL 33133
-----------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (305) 913-3300
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
A. FINANCIAL STATEMENTS OF BUSINESS ACQUIRED.
AUDITED FINANCIAL STATEMENTS OF KNOWLEDGEWARE SOLUTIONS, LLC
Independent Auditors' Report F-1
Balance Sheet as of August 31, 1999 F-2
Statement of Operations for the period from inception through the year
ended August 31, 1999 F-3
Statement of Changes in Members' Equity for the period from inception
through the year ended August 31, 1999 F-4
Statement of Cash Flows for the period from inception through the year
ended August 31, 1999 F-5
Notes to Audited Financial Statements F-6 - F-11
B. PRO FORMA FINANCIAL INFORMATION.
Introduction F-12
Pro Forma Balance Sheet as of August 31, 1999 F-13
Pro Forma Statement of Operations for the year ended August 31, 1999 F-14
Pro Forma Statement of Stockholders' Deficient for the year ended
August 31, 1999 F-15
Pro Forma Statement of Cash Flows for the year ended August 31, 1999 F-16- F-17
Notes to Pro Forma Financial Statements F-18
C. EXHIBITS.
2.1 Agreement and Plan of Merger by and among the Company
and William Klco, Kathleen McFadden, Steven Gauld and
Dane Powell dated November 12, 1999.
23.1 Consent of Perez-Abreu, Augerrebere, Sueiro LLC.
INDEPENDENT AUDITOR'S REPORT
To the Members
Knowledgeware Solutions, LLC
We have audited the accompanying balance sheet of Knowledgeware Solutions,
LLC (A Limited Liability Company) as of August 31, 1999 and the related
statements of operations, changes in members' equity, and cash flows for the
period from inception (April 19, 1999) through August 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In ouropinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Knowledgeware Solutions, LLC
as of August 31, 1999, and the results of its operations and its cash flows
for the period from inception (April 19, 1999) through August 31, 1999 in
conformity with generally accepted accounting principles.
/s/ PEREZ-ABREU, AGUERREBERE, SUEIRO LLC
PEREZ-ABREU, AGUERREBERE, SUEIRO LLC
Certified Public Accountants
Coral Gables, Florida
January 21, 2000
F-1
KNOWLEDGEWARE SOLUTIONS, LLC
BALANCE SHEET
AUGUST 31, 1999
ASSETS
CURRENT ASSETS
Cash $ 15,383
Accounts receivable 15,466
Other current assets 15,161
---------------
TOTAL CURRENT ASSETS 46,010
PROPERTY AND EQUIPMENT, net 268,849
OTHER ASSETS 3,840
---------------
$ 318,699
===============
LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 45,273
Current maturities of obligations under capital leases 14,433
---------------
TOTAL CURRENT LIABILITIES 59,706
OBLIGATIONS UNDER CAPITAL LEASES, less current maturities 27,667
---------------
TOTAL LIABILITIES 87,373
COMMITMENTS AND CONTINGENCIES
MEMBERS' EQUITY 231,326
---------------
$ 318,699
===============
The accompanying notes are an integral part of these financial statements.
F-2
KNOWLEDGEWARE SOLUTIONS, LLC
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION (APRIL 19, 1999)
THROUGH AUGUST 31, 1999
Revenue $ 30,905
Cost of revenue 94,117
-------------
(63,212)
OPERATING EXPENSES
Selling 38,196
General and administrative 73,222
-------------
111,418
-------------
LOSS FROM OPERATIONS (174,630)
OTHER INCOME 14,791
-------------
NET LOSS $ (159,839)
=============
PRO-FORMA PRESENTATION OF NET LOSS PER COMMON SHARE:
BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (15.98)
========
WEIGHTED AVERAGE SHARES USED IN THE CALCULATION
OF BASIC AND DILUTED NET LOSS PER COMMON SHARE 10,000
========
The accompanying notes are an integral part of these financial statements.
F-3
KNOWLEDGEWARE SOLUTIONS, LLC
STATEMENT OF CHANGES IN MEMBERS' EQUITY
FOR THE PERIOD FROM INCEPTION (APRIL 19, 1999)
THROUGH AUGUST 31, 1999
Members' initial contributions $ 528,563
Members' distributions (137,398)
Net loss (159,839)
---------------
Members' equity - August 31, 1999 $ 231,326
===============
The accompanying notes are an integral part of these financial statements.
F-4
KNOWLEDGEWARE SOLUTIONS, LLC
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION (APRIL 19, 1999)
THROUGH AUGUST 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (159,839)
------------
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 17,263
Changes in operating assets and liabilities:
Accounts receivable (15,466)
Other current assets (15,161)
Accounts payable and other accrued expenses 45,273
------------
TOTAL ADJUSTMENTS 31,909
------------
NET CASH USED IN OPERATING ACTIVITIES (127,930)
------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (26,066)
Increase in other assets (3,840)
------------
NET CASH USED IN INVESTING ACTIVITIES (29,906)
------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of obligations under capital leases (4,383)
Members' contributions 315,000
Members' distributions (137,398)
------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 173,219
------------
NET INCREASE IN CASH 15,383
CASH AT BEGINNING OF PERIOD -
------------
CASH AT END OF PERIOD $ 15,383
============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Acquisitions of equipment through capital leases $ 46,483
============
Members' contribution of property and equipment $ 213,563
============
OTHER SUPPLEMENTAL INFORMATION:
Interest paid $ 2,077
============
The accompanying notes are an integral part of these financial statements.
F-5
NOTE 1 - BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) BUSINESS OPERATIONS
Knowledgeware Solutions, LLC (A Michigan Limited Liability
Company) (the "Company") was formed on April 19, 1999 as
Knowsol Acquisition, LLC for the sole purpose of acquiring
certain assets, including the name, of an ongoing business.
Shortly after consummating the Asset Sale Agreement, Knowsol
Acquisitions, LLC amended its Articles of Organization to
reflect its current name, Knowledgeware Solutions, LLC.
The Company designs, develops and deploys technology-based
courseware that companies can use to train their employees.
The Company develops such courseware by utilizing advanced
adult learning concepts and the latest technology to provide
a complete technology based training solution for its
customers. The Company helps its customers to identify,
define and script learning components. Each of the learning
components is then developed to suit the specific needs of
the target audience and achieve specified learning
objectives. The custom courseware can then be deployed over
the Internet or distributed on CD-ROM.
In September 1999, the members of this limited liability
company incorporated the Company in Michigan and transferred
all of the assets and liabilities of Knowledgeware Solutions
LLC to Knowledgeware Solutions, Inc. (KSI). In November 1999,
KSI and its shareholders entered into a Merger Agreement
("Agreement") with Nicollet Process Engineering, Inc, d/b/a
XBOX Technologies, Inc. ("XBOX") and its wholly-owned
subsidiary, Knowledgeware Acquisition Corp. ("Sub"). Under
the terms of the Agreement, the shareholders of KSI were to
receive a certain number of shares of XBOX and certain
options to purchase additional shares. XBOX received all
10,000 outstanding shares of KSI as a result of the Agreement.
B) REVENUE RECOGNITION
The Company recognizes revenue in compliance with Statement
of Position No. 97-2, SOFTWARE REVENUE RECOGNITION. Product
revenues are generally recognized as products are shipped,
but may be recognized when installed or accepted, depending
upon the particular product and contract terms. Training and
installation revenues are recognized as the services are
performed, generally within a few days of delivery. The
Company defers revenue related to any future obligations it
could have under maintenance or warranty agreements. The
Company recognizes revenue related to these agreements
ratably over the life of the agreements or as the obligations
are fulfilled.
C) PROPERTY AND EQUIPMENT
The accompanying notes are an integral part of these financial statements.
F-6
Property and equipment are stated at cost. Depreciation is
computed on the straight-line method over the estimated
useful lives of the various assets, ranging from five to ten
years. Amortization of leasehold improvements is provided
using the straight-line method over the term of the leases.
NOTE 1 - BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
D) INCOME TAXES
The Company files its federal income tax return as a
Partnership and does not pay income taxes inasmuch as any
income or loss is included in the tax returns of its members.
Accordingly, no provision has been made for income taxes in
these financial statements.
E) RISKS AND UNCERTAINTIES
The Company is in the software industry, which is
characterized by rapid technological advances and frequent
new product introductions. The inability to develop or
introduce new products could result in a loss of
competitiveness or revenues.
The Company's success depends to a significant extent upon
its ability to attract and retain highly talented personnel
to meet current and future needs of the Company. Competition
for such personnel is intense, as the Company grows it will
require additional experienced personnel. There can be no
assurances that the Company will be able to timely employ
and train adequate numbers of personnel to meet its present
and future requirements. If the Company is unable to train
adequate numbers of experienced personnel to meet its present
and future requirements, the Company's performance could be
materially and adversely affected.
The Company may not have adequate financial and personnel
resources to maintain research and development capabilities
and, consequently, to maintain its technology position.
There can be no assurance that the Company will be able to
compete successfully in the future or that competition in
the future will not have a material adverse effect on the
Company's business, financial condition and results of
operations.
F) MANAGEMENT ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues
and expenses during the period from inception through
August 31, 1999. Actual results could differ from those
estimates.
The accompanying notes are an integral part of these financial statements.
F-7
NOTE 1 - BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
G) COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" for the
period presented. Comprehensive income includes net income
as well as other comprehensive income. Other comprehensive
income refers to revenues, expenses, gains and losses that
under generally accepted accounting principles are included
in comprehensive income but excluded from net income. For
the period presented, the Company had no items of other
comprehensive income.
H) NET LOSS PER SHARE
The net income (loss) per share is computed by dividing the
net income or loss for the period by the weighted average
number of shares outstanding (as adjusted retroactively for
the dilutive effect of prior year common stock options) for
the period plus the dilutive effect of outstanding common
stock options and warrants considered to be common stock
equivalents. Stock options and other common stock equivalents
are excluded from the 1999 net loss per share calculation as
their effect would be anti-dilutive.
Basic and diluted earnings per share amounts are equal
because the Company has a loss from continuing operations
and consideration of the, outstanding options, warrants and
their equivalents would result in anti-dilutive effects to
earnings per share.
PRO-FORMA PRESENTATION OF NET LOSS PER COMMON SHARE
The Company is a limited liability company, as such, the
Company does not have authorized, issued or outstanding
common stock. As a result of the Merger Agreement discussed
in note 1A, the Company is deemed to have had 10,000 shares
of common stock for purposes of the calculation of net loss
per share.
The weighted average number of shares used to compute EPS
were 10,000.
I) YEAR 2000 SYSTEMS COSTS
The Company utilizes software and related technologies
throughout its business that will be affected by the date
change in the year 2000. Anticipated costs for system
modifications will be expensed as incurred and are not
expected to have a material impact on the Company's results
of operations. However, the Company cannot measure the impact
that the Year 2000 issue will have on its vendors, suppliers,
customers and other parties with whom it conducts business.
The accompanying notes are an integral part of these financial statements.
F-8
NOTE 1 - BUSINESS OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED)
J) MAJOR CUSTOMERS
Sales are composed of two customers. Sales to customer A
were 74% of total revenues. Sales to customer B were 26% of
total revenues.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
Furniture and fixtures $ 123,213
Office and computer equipment 105,801
Leasehold improvements 10,615
Equipment under capital leases 46,483
-------------
286,112
Less accumulated depreciation and amortization,
including $4,383 on property under capital leases (17,263)
-------------
$ 268,849
=============
Depreciation and amortization expense were $12,880 and $4,383,
respectively.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
CAPITAL LEASE OBLIGATIONS
The Company leases various equipment under capital lease
agreements expiring through 2002. The following is a schedule, by
years, of future minimum lease payments under the capital leases:
Years ending August 31,
2000 $ 19,378
2001 18,820
2002 11,804
-------------
Total minimum lease payments 50,002
Less amount representing interest 7,902
-------------
42,100
Less current maturities 14,433
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$ 27,667
=============
The accompanying notes are an integral part of these financial statements.
F-9
NOTE 3 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
OPERATING LEASE
The Company has entered into an operating lease for office space
through May 2002. Approximate future lease payments under the
operating lease are as follows:
Years ending August 31,
2000 $ 32,500
2001 35,400
2002 28,300
-------------
$ 96,200
=============
Rent expense amounted to approximately $7,900 for the period from
inception through August 31, 1999.
LITIGATION
The Company is exposed to various asserted and unasserted potential
claims encountered in the normal course of business. In the opinion
of management, the resolution of these matters will not have a
material effect on the Company's financial position or the results
of its operations.
NOTE 4 - FAIR VALUE
The Company has estimated the fair value of its financial instruments
at August 31, 1999, as required by Statement of Financial Accounting
Standards No. 107, "Disclosure about Fair Value of Financial
Instruments." The carrying values of cash, accounts receivable,
accounts payable and accrued expenses are reasonable estimates of
their fair values.
NOTE 5 - MEMBERS' EQUITY
The Company is a limited liability company, as such, the Company
does not have authorized, issued or outstanding common stock. As a
result of the Merger Agreement discussed in note 1A, the Company is
deemed to have had 10,000 shares of common stock for purposes of
the calculation of net loss per share.
The accompanying notes are an integral part of these financial statements.
F-10
NOTE 6 - EMPLOYEE BENEFIT PLAN
Effective May 1, 1999 the Company adopted the Knowledgeware
Solutions, LLC 401(k) Profit Sharing Plan (the "Plan"), a defined
contribution benefit plan which qualifies under Section 401(k) of
the Internal Revenue Code. All employees of the Company are
eligible to participate in the Plan. Participants may contribute up
to the maximum percentage allowable not to exceed the limits of
Internal Revenue Code 401(k) of their base salary to the Plan. The
Company's matching contributions are discretionary. The Company did
not contribute to the Plan for the period ended August 31, 1999.
NOTE 7 - SUBSEQUENT EVENTS
In November 1999, the Company, through KSI, entered into a plan to
merger with XBOX.
The accompanying notes are an integral part of these financial statements.
F-11
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Stockholders
Nicollet Process Engineering, Inc.
d/b/a XBOX Technologies, Inc.
We have examined the pro-forma adjustments reflecting the transaction
described in Note 1A and the application of those adjustments to the
historical amounts in the assembly of the accompanying pro-forma condensed
balance sheet of Nicollet Process Engineering, Inc. d/b/a XBOX Technologies,
Inc. as of August 31, 1999, and the pro-forma condensed statement of
operations, stockholders' deficit and cash flows for the year ended August
31, 1999. The historical condensed financial statements are derived from the
historical financial statements of Nicollet Process Engineering, Inc. d/b/a
XBOX Technologies, Inc., which were audited by other auditors. Our
examination was made in accordance with standards established by the American
Institute of Certified Public Accountants and, accordingly, included such
procedures as we considered necessary in the circumstances.
The objective of this pro-forma financial information is to show what the
significant effects on the historical financial information might have been
had the transaction occurred at an earlier date. However, the pro-forma
condensed financial statements are not necessarily indicative of the results
of operations or related effects on financial position that would have been
attained had the above-mentioned transaction actually occurred earlier.
In our opinion, management's assumptions provide a reasonable basis for
presenting the significant effects directly attributable to the
above-mentioned transaction described in Note 1A, the related pro-forma
adjustments give appropriate effect to those assumptions, and the pro-forma
column reflects the proper application of those adjustments to the historical
financial statement amounts in the pro-forma condensed balance sheet as of
August 31, 1999 and the pro-forma condensed statement of operations,
stockholders' deficit and cash flows for the year ended August 31, 1999.
/s/ PEREZ-ABREU, AGUERREBERE, SUEIRO LLC
PEREZ-ABREU, AGUERREBERE, SUEIRO LLC
Certified Public Accountants
Coral Gables, Florida
January 21, 2000
F-12
NICOLLET PROCESS ENGINEERING, INC.
D/B/A XBOX TECHNOLOGIES, INC.
(PRO-FORMA) BALANCE SHEET
AUGUST 31, 1999
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 215,431
Accounts receivable (net of allowance for doubtful accounts of $56,142) 104,389
Notes receivable - related party 651,709
Inventories 93,674
Prepaid expenses 34,515
--------------
TOTAL CURRENT ASSETS 1,099,718
PROPERTY AND EQUIPMENT, net 505,763
OTHER ASSETS 32,734
--------------
$ 1,638,215
==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 333,490
Accounts payable - related party 59,450
Accrued payroll liabilities 272,086
Other current liabilities 69,857
Customer deposits 12,615
Accrued Consulting fees - related party 550,000
Accrued Interest 266,721
Current maturities of obligations under capital leases 20,637
--------------
TOTAL CURRENT LIABILITIES 1,584,856
NOTES PAYABLE 1,559,900
OBLIGATIONS UNDER CAPITAL LEASES, less current maturities 39,488
--------------
TOTAL LIABILITIES 3,184,244
--------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Preferred stock, no par value:
5,000,000 authorized, none issued and outstanding -
Common stock, no par value:
50,000,000 authorized, 26,412,861 issued and outstanding 12,494,048
Accumulated deficit (14,040,077)
--------------
TOTAL STOCKHOLDERS' DEFICIT (1,546,029)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,638,215
==============
The accompanying notes are an integral part of these financial statements.
F-13
NICOLLET PROCESS ENGINEERING, INC.
D/B/A XBOX TECHNOLOGIES, INC.
(PRO-FORMA) STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1999
REVENUES $ 1,508,929
COST OF REVENUES 1,165,645
---------------
GROSS PROFIT 343,284
OPERATING EXPENSES
Selling 1,100,117
Research and development 329,238
General and administrative 2,677,319
---------------
LOSS FROM OPERATIONS (3,763,390)
INTEREST EXPENSE (255,335)
INTEREST AND OTHER INCOME 18,581
---------------
NET LOSS $ (4,000,144)
===============
PRO-FORMA PRESENTATION OF NET LOSS PER COMMON SHARE:
BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (.48)
=========
WEIGHTED AVERAGE SHARES USED IN THE CALCULATION
OF BASIC AND DILUTED NET LOSS PER COMMON SHARE 8,341,805
=========
The accompanying notes are an integral part of these financial statements.
F-14
NICOLLET PROCESS ENGINEERING, INC.
D/B/A XBOX TECHNOLOGIES, INC.
(PRO-FORMA) STATEMENT OF STOCKHOLDERS' DEFICIT
YEAR ENDED AUGUST 31, 1999
SHARES OF
COMMON ACCUMULATED
STOCK AMOUNT DEFICIT TOTAL
------------ ------------- -------------- -------------
Balances - August 31, 1998 6,211,861 $ 8,939,949 $ (10,039,933) $ (1,099,984)
Stock option exercises 201,000 67,588 - 67,588
Issuance of common stock in
connection with debt conversion 20,000,000 3,000,000 - 3,000,000
Compensation expense associated
With change in option vesting period - 95,346 - 95,346
Net equity acquired in connection
with merger agreement - 391,165 - 391,165
Net loss - - (4,000,144) (4,000,144)
------------ ------------- -------------- -------------
Balances - August 31, 1999 26,412,861 $ 12,494,048 $ (14,040,077) $ (1,546,029)
============ ============= ============== =============
The accompanying notes are an integral part of these financial statements.
F-15
NICOLLET PROCESS ENGINEERING, INC.
D/B/A XBOX TECHNOLOGIES, INC.
(PRO-FORMA) STATEMENT OF CASH FLOWS
YEAR ENDED AUGUST 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (4,000,144)
---------------
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 122,444
Amortization 169,779
Compensation expense in connection with options 95,346
Gain on disposal of assets (3,790)
Changes in operating assets and liabilities:
Accounts receivable 20,596
Inventories 151,573
Prepaid expenses and other current assets (19,845)
Accounts payable (60,072)
Accounts payable - related party 59,450
Other current liabilities 567,877
Accrued payroll liabilities 214,849
Accrued interest 244,623
Customer deposits (101,400)
---------------
NET CASH USED IN OPERATING ACTIVITIES (2,538,714)
---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (145,045)
Loans to related party (651,709)
Other assets (1,947)
Proceeds from sale of fixed assets 3,790
---------------
NET CASH USED IN INVESTING ACTIVITIES (794,911)
---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable 3,054,000
Payments on capitalized lease obligations (8,944)
Stockholder contributions 315,000
Distributions to stockholders (137,398)
Proceeds from exercise of stock options and warrants 67,588
---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 3,291,146
---------------
NET DECREASE IN CASH (42,479)
CASH AT BEGINNING OF PERIOD 257,910
---------------
CASH AT END OF PERIOD $ 215,431
===============
The accompanying notes are an integral part of these financial statements.
F-16
NICOLLET PROCESS ENGINEERING, INC.
D/B/A XBOX TECHNOLOGIES, INC.
(PRO-FORMA) STATEMENT OF CASH FLOWS (CONTINUED)
YEAR ENDED AUGUST 31, 1999
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Acquisitions of equipment through capital leases $ 59,266
=============
Value of common stock issued in connection with the debt-to-equity
Conversion $ 3,000,000
=============
Stockholders' contribution of property and equipment $ 213,563
=============
OTHER SUPPLEMENTAL INFORMATION:
Interest paid $ 17,107
=============
The accompanying notes are an integral part of these financial statements.
F-17
NOTE 1 - PRO-FORMA PRESENTATION
In September 1999, the members of Knowledgeware Solutions, LLC, a
limited liability company, incorporated Knowledgeware Solutions, Inc.
(KSI) in Michigan and transferred all of the assets and liabilities
of Knowledgeware Solutions, LLC to KSI.
On November 12, 1999, Nicollet Process Engineering, Inc.
("Nicollet") entered into a plan of merger with KSI. Nicollet issued
704,345 shares of common stock for the 10,000 shares outstanding of
KSI. Nicollet has also reserved 978,862 shares of its common stock
for options to be granted to the shareholders of KSI at the time of
the closing through the following three years.
The accompanying pro-forma financial statements reflect the
historical results of operations, cash flows and balance sheets of
Nicollet Process Engineering, Inc. and Knowledgeware Solutions, LLC
on a combined basis.
The pro-forma presentation of net loss per share reflects the 704,345
shares issued as part of the merger as outstanding from May 1, 1999
(the start of operations of Knowledgeware Solutions, LLC) through
August 31, 1999. The weighted average of these shares is 234,782,
therefore the weighted average number of shares used in the pro-forma
presentation of net loss per share is 8,341,805.
The accompanying notes are an integral part of these financial statements.
F-18
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.
NICOLLET PROCESS ENGINEERING, INC.
/s/ Evros Psiloyenis
----------------------------------
By: Evros Psiloyenis
Its: President
Dated: January 27, 2000
INDEX TO EXHIBITS
Item Method of Filing
- ---- ----------------
2.1 Agreement and Plan of Merger by and among the Company and William
Klco, Kathleen McFadden, Steven Gauld and Dane Powell dated
November 12, 1999................................................. File electronically
herewith*
23.1 Consent of Perez-Abreu, Augerrebere, Sueiro LLC................... Filed electronically
herewith.
- ---------------------------
*Indicates item previously filed.