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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
Date of Report (Date of earliest event reported) November 6, 1997
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AMERICAN ENTERTAINMENT GROUP, INC.
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(Exact Name of Registrant as Specified in its Charter)
COLORADO 0-22174 83-0277375
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(State or other (Commission IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation
or Organization)
160 Bedford Road, Suite 306
Toronto, Ontario, Canada M5R 2K9
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(Address of Principal Executive Offices, Zip Code)
(416) 920-1919
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(Registrant's telephone number, including area code)
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Act of 1934
Item 1. CHANGES IN CONTROL OF REGISTRANT.
Not Applicable
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
See Item 5 below.
Item 3. BANKRUPTCY OR RECEIVERSHIP
Not Applicable
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not Applicable
Item 5. OTHER EVENTS
In November 3, 1997, the Registrant entered into a definitive
Agreement dated September 30, 1997 with Tel.n.Form Interactive Communications
Corp (Tel.n.Form) whereby the Registrant would acquire 52.5% of the issued
and outstanding shares of Tel.n.Form in exchange for a purchase price of
$1,050,000US, payable in preferred shares of the Registrant, valued at
$10.00US per share.
The preferred shares will have the following characteristics. First
the shares will be redeemable according to a schedule which is tied to
approval by the U.S. Bankruptcy Court having jurisdiction over the
Registrant. A total of one-half of the preferred shares are to be redeemable
upon approval of the Registrant's Chapter 11 Reorganization Plan and the
obtaining of adequate financing, if and when such events occur. Second, the
preferred shares are convertible into common shares at a price of $2.50 per
share for eighteen months after the date of closing. Third, the preferred
shares will pay a cumulative dividend of 6% per annum, and no dividends on
common shares are to be paid until preferred share dividends have been paid.
Fourth, preferred shares will be entitled to participate in the net profits
(as defined in the Agreement) of the Registrant at the rate of 0.000055% per
share. Finally, the preferred shares are callable by the Registrant for a
period of four years from date of issue at $12 per share. The closing of the
transaction is still subject to continuing, appropriate due diligence of the
parties, the obtaining of a "fairness" opinion to confirm the value of
Tel.n.Form, the arrangement of suitable financing at the closing, approval of
the transaction by Tel.n.Form shareholders, and appropriate regulatory
compliance. The parties anticipate a closing of the transaction on or about
January 31, 1998.
Tel.n.Form comprises a group of companies in the business of using
automation and computer technology to replace repetitive manual business in
the automotive and hotel industries. Among these companies is Credit.Link,
a service provided to car dealers that generates lead information obtained
from the public and transmitted to such dealers nationwide.
On October 27, 1997, the Registrant entered into a definitive
Agreement with Hollywood Select, Inc. (HSI) to modify and supersede the
Registrant's prior relationship with HSI. The Registrant had previously
entered into agreements in 1993 with HSI regarding the acquisition of the
Registrant's film library, which is its principal asset. This new Agreement,
which replaces all previous
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agreements, provides for the Registrant and HSI to set up a new corporation
(Newco), which would be owned by both parties, with the Registrant owning 51%
thereof. Newco would have access to a total of approximately 14,000 public
domain film titles from HSI. In addition, the Registrant would contribute
the sum of $1,000,000US as a loan to Newco. The final terms of the loan
remain to be determined, but will at least be at a rate equal to the
Registrant's cost of borrowing and will be payable out of the net profit
before income taxes and before any other distributions to Newco shareholders.
Newco will reserve a total of $200 per title acquired by Newco, to be paid to
HSI once the Newco loan has been repaid to the Registrant. HSI has also to
deliver to the Registrant, without further cost, an additional 250 titles
for the Registrant's account in satisfaction of its remaining obligation
under the prior referred to 1993 agreements. As a part of the Agreement, the
Registrant and HSI will contribute their efforts to develop of business plan
for Newco, which is expected to be completed by December 1, 1997.
The closing of the transaction is subject to approval of the
Registrant's Chapter 11 Reorganization Plan and the obtaining of adequate
financing, if and when such events occur. If these events do not occur, then
HSI will have the right to purchase control of Newco for a nominal sum.
Item 6. RESIGNATION OF REGISTRANT'S DIRECTORS
Not Applicable
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Not Applicable
Item 8. CHANGE IN FISCAL YEAR
Not Applicable
Item 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S
Not Applicable
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SIGNATURES
Pursuant to 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.
AMERICAN ENTERTAINMENT GROUP, INC.
By: //Joel Wagman//
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Joel Wagman
Chairman
Dated: November 6, 1997
