UNITED STATES
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
Date of Report (Date of earliest event reported):
July 29, 1999
NICOLLET PROCESS ENGINEERING, INC.
(Exact name of registrant as specified in its charter)
Minnesota 0-27928 41-1528120
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
420 North Fifth Street, Ford Centre Suite 1040
Minneapolis, Minnesota 55401
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(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 339-7958
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ITEM 1. CHANGE IN CONTROL OF REGISTRANT.
On June 3, 1998, Norwest Business Credit, Inc. assigned all of its right,
title and interest in the Company's credit facilities with Norwest Business
Credit, Inc. to TECHinspirations, Inc. ("TECH"), a Nevada corporation and a
wholly-owned subsidiary of TECH Cayman. The loan documents underlying the
credit facility (the "Credit Facility") consisted of a revolving promissory
note, dated May 28, 1997, in the principal amount of $800,000, a credit and
security agreement which, among other things, granted TECH a security interest
in all of the Company's assets. TECH Cayman has advanced funds to the Company
under the Credit Facility since June 3, 1998, and as of June 30, 1999, the
aggregate amount advanced to the Company was $3,277,277. TECH Cayman used
internal funds to make the advance. On July 29, 1999, the Company, TECH and
TECH Cayman entered into an Acknowledgement and Amending Agreement pursuant to
which the Credit Facility was assigned to TECH Cayman. TECH Cayman may continue
to make discretionary advances to the Company under the Credit Facility.
Effective November 30, 1998, the Company entered into a Letter of Intent
with TECHinspirations, Inc., a Nevada corporation ("TECH"), which provided for
the basis on which TECHinspirations, Inc. (Cayman), a Cayman Island corporation
("TECH Cayman"), would provide $3,000,000 in debt/equity financing
(the "Financing") to the Company. The terms of the Financing included the
issuance of 1,500,000 shares of Preferred Stock at a price of $1.00 per share,
the proceeds of which would be used to repay $1,500,000 of the advances under a
credit facility which was assigned by Norwest Business Credit, Inc. To TECH on
June 3, 1998 (the "Credit Facility"). The Credit Facility is secured by a
security interest in all of the Company's assets. In addition, the Company
would issue TECH Cayman a warrant to purchase an additional 1,500,000 shares of
Preferred Stock at an exercise price of $1.00 per share (the "Preferred Stock
Warrant"). The Preferred Stock Warrant would expire three years after the
closing of the Financing or repayment of the Credit Facility, whichever were
later. The Preferred Stock would have the following rights and preferences.
Each share of Preferred Stock would be convertible at the option of the holder
into 6-2/3 shares of Common Stock and have the right to vote on all matters
submitted to holders of the Common Stock on an as-if-converted basis. Each
share of Preferred Stock would have the right to participate in all dividends
declared on the Common Stock on an as-if-converted basis. In addition, each
share of Preferred Stock would be entitled to a liquidation preference of $1.00
per share prior to any distributions to be made on the Common Stock and, after
payment of such preference, would share, PARI PASSU, with any distributions made
to holders of the Common Stock on an as-if-converted basis.
The Letter of Credit also contemplated that TECH Cayman would continue to
make available to the Company a $1,500,000 revolving operating line of credit.
The line of credit would continue to be secured by a security interest in the
Company's assets, bear interest at the rate of 1% in excess of the prime rate
and have a term of three years. The Company also agreed to pay TECH a fee of
$200,000 payable in monthly installments of $25,000 each beginning December 1,
1998 through June 30, 1999. The Company had previously paid TECH an aggregate
of $100,000 for the period from July 31, 1998 through November 30, 1998. The
Company has agreed to issue TECH warrants to purchase up to 4,750,000 shares of
Common Stock at a price of $.15 per share (the "Common Stock Warrant"). The
Common Stock Warrant would be immediately exercisable with respect to 1,500,000
shares, and become exercisable with respect to an additional 1,000,000 shares,
1,000,000 shares and 1,250,000 shares after the Company's Common Stock had
closed at a price of at least $1.00, $2.00 and $3.00 per share, respectively,
for a period of ten days. TECH Cayman also has the right to designate a
majority of the nominees for election to the Board of Directors. John van
Leeuwen and Manuel Schiappa Pietra, both of whom are officers and employees of
TECH, are members of the Board of Directors of the Company, as designees of TECH
Cayman.
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On July 29, 1999, the Company entered into a Stock Purchase Agreement with
TECH Cayman (the "Purchase Agreement") in order to consummate the transactions
contemplated by the Letter of Intent. Under the Purchase Agreement, TECH Cayman
converted (a) $3,000,000 of indebtedness under the Credit Facility into
20,000,000 shares of the Company's Common Stock at a conversion price of $.15
per share (the "Shares") and (b) $100 of indebtedness under the Credit Facility
into the Common Stock Warrant. The Shares and the Common Stock Warrant were
issued in lieu of the Preferred Stock and Preferred Stock Warrant under the
Letter of Intent at an equivalent price per share of Common Stock. As a result
of these transactions, TECH Cayman is now the beneficial owner of an aggregate
24,750,000 shares of Common Stock, consisting of 20,000,000 shares of Common
Stock and the Common Stock Warrant covering 4,750,000 shares of Common Stock, or
approximately 79.7% of the current outstanding shares of Common Stock.
In connection with the Purchase Agreement, the Company, TECH and TECH
Cayman entered into an Acknowledgement and Amending Agreement pursuant to which
the Credit Facility was assigned to TECH Cayman. TECH Cayman may continue to
make discretionary advances to the Company under the Credit Facility.
In connection with the Purchase Agreement, the Company and TECH entered
into a Consulting Agreement under which TECH agreed to provide various
consulting service to the Company. The Consulting Agreement has a term from
July 1, 1999 through June 30, 2001 and provides for a consulting fee of $25,000
per month.
The foregoing summary of certain provisions of the Purchase Agreement,
Conversion Agreement, Common Stock Warrant and Consulting Agreement is qualified
by the copies of such documents filed as Exhibits to this Form 8-K, and which
are incorporated herein in its entirety by this reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION. Not applicable.
(c) EXHIBITS.
Exhibit No. Description
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99.1 Purchase Agreement, dated as of July 29, 1999, between the
Company and TECH Cayman.
99.2 Common Stock Warrant, dated as of July 29, 1999, issued by the
Company to TECH Cayman.
99.3 Conversion Agreement, dated as of July 29, 1999, between the
Company and TECH Cayman.
99.4 Consulting Agreement, dated as of July 29, 1999, between the
Company and TECH.
99.5 Acknowledgment and Amending Agreement, dated as of July 29,
1999 between the Company, TECH and TECH Cayman.
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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
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By: Evros Psiloyenis
Its: President
Dated: August 13, 1999
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INDEX TO EXHIBITS
Exhibit No. Description Method
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99.1 Purchase Agreement, dated as of July 29, Filed herewith.
1999, between the Company and TECH Cayman.
99.2 Common Stock Warrant, dated as of July 29, Filed herewith.
1999, issued by the Company to TECH Cayman.
99.3 Conversion Agreement, dated as of July 29, Filed herewith.
1999, between the Company and TECH Cayman.
99.4 Consulting Agreement, dated as of July 29, Filed herewith.
1999, between the Company and TECH.
99.5 Acknowledgment and Amending Agreement, Filed herewith.
dated as of July 29, 1999, between the
Company, TECH and TECH Cayman.
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