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): June 4, 1997
North Atlantic Technologies, Inc.
(Exact name of Registrant as specified in its charter)
Minnesota
(State or other jurisdiction of incorporation)
2-85984-C 41-1390785
(Commission File Number) (IRS Employer Identification No.)
8120 Penn Avenue South, Suite 435, Bloomington, Minnesota 55431
(Address of principal executive offices)(Zip Code)
(612) 888-8553
(Registrant's telephone number)
ITEM 5. OTHER EVENTS.
Since 1987, Willis D. Heim, a principal shareholder and a former
director of North Atlantic Technologies, Inc. (the "Company") has irrevocably
guaranteed the Company's obligations under its line of credit extended by First
Bank, National Association (the "Bank"). In June 1995, the Company borrowed
$500,000 from WDH Investments, Co., an affiliate of Mr. Heim. The loan from WDH
Investments, Co., was secured by a mortgage upon the Company's production
facility located in St. Paul, Minnesota. The mortgage loan becomes immediately
due if the Company defaults on its obligations due the Bank.
In May 1996, the Company and the Bank amended and restated the
Company's credit relationships with the Bank establishing a $1,150,000 line of
credit and a $500,000 term loan. The line of credit, which was subsequently
increased to $1,250,000 was required to be repaid in full or renewed for an
additional twelve month period on June 1, 1997.
On June 4, 1997, the Company was advised that Mr. Heim would not
consent to the renewal of the line of credit he has guaranteed. The Company
understands that this is due to the failure of the Company to obtain sufficient
orders for the Company's products which would support a conclusion that the
Company will be able to operate on a profitable basis for the remainder of 1997.
The Company further understands that without Mr. Heim's consent, the Bank will
not renew the line of credit.
The failure to renew the line of credit will result in the term loan
with the Bank and the mortgage loan with WDH Investments, Co. being immediately
due. As of June 1, 1997, the Company owed $1,160,000 under the line of credit,
$404,081.73 under the Bank term loan and $474,262.10 under the mortgage loan.
Substantially all of the Company's assets are pledged as collateral for these
credit facilities.
The Company is currently engaged in negotiations with Mr. Heim;
however, there can be no assurance that the Company will be able to continue to
operate or avoid a foreclosure on its assets.
SIGNATURE
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 hereunto duly authorized.
NORTH ATLANTIC TECHNOLOGIES, INC.
Dated: June 11, 1997 By: /s/ Allen Karson
Allen Karson
President and Chief Executive Officer
