SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: September 1, 1998
AMERECO, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 0-14609
Utah 84-0960456
(State or other jurisdiction (IRS Employer Identification
of incorporation) Number)
5660 Greenwood Plaza Blvd., Suite 101, Englewood, CO 80111
(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (303)296-6789
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 1. Changes in Control of Registrant: None
ITEM 2. Acquisition or Disposition of Assets: Since August, 1997, AMERECO,
Inc. (the "Registrant") and its operating subsidiary, Omnivest Resources,
Inc., a Georgia corporation ("ORI") have experienced difficulty in meeting
its obligations as they become due. This was primarily due to the inability
of ORI to obtain a $2.0 million working capital loan planned to be colla-
teralized by a $900 K Letter of Credit to be provided by the 66.3% control
interest in the Registrant held by Wei Ming Lu and affiliates (the "Lu
Group") which the Registrant expected to be funded by First Federal Savings
Bank of Donalsonville, Georgia (the "Lender"), or another lender, immedi-
ately subsequent to the funding of a $5.0 million long term financing from
the Lender. For the period since such date, in consequence of the working
capital shortfall which the Registrant was experiencing, the Registrant's
senior management have engaged in extensive negotiations with the Lu Group,
other shareholders, potential investors, potential co-joint venturers, and
potential purchasers of the business. Steven H. Miller, President of both
the Registrant and ORI, and Kenneth W. Tribbey, Executive Vice President of
both the Registrant and ORI, have not been paid any salaries since August
1997. Messrs. Miller and Tribbey collectively hold less than 4% of the
outstanding securities of the Registrant, and prior to January, 1997 pledged
shares and options to acquire shares in the Registrant held by them to
secure working capital indebtedness of the ORI to the Lu Group. In
February, 1997 all representives from the largest shareholders resigned from
the Registrant's Board of Directors (see SEC Form 8K filed February 26,
1997). See Items 5 and 6. Nevertheless, Messrs. Miller and Tribbey have
devoted substantial time and effort to the business of the Registrant and
ORI without compensation for over a year, while aggressively pursuing a
variety of solutions to ORI's working capital shortfall.
In May, 1998, the Registrant closed certain production facilities of
its plant for reworking of such production facilities, with a plan to fully
reopen the reworked production facilities in August, 1998. The Registrant
has been unable, to date, to obtain sufficient working capital to reopen its
production facilities. Further, ORI is in default on its obligations in
respect of approximately $5.3 million in secured debt owed to ORI's Lender,
and in default of loans to the Lu Group.
In August, 1998, the Lender gave ORI and the Registrant, as
guarantor, notice of acceleration, notice of a foreclosure sale on the deed
to secure debt on the real property which constitutes the primary working
asset of ORI, and notice of a demand to surrender ORI's personal
property prior to foreclosure under the Lender's security interests in ORI's
equipment, fixtures, accounts, and other personal property assets. On August
31, 1998, ORI's current management had exhausted all attempts to
achieve a reasonable prospect to solve ORI's working capital crisis and cure
its defaults. On September 1, 1998, the Lender had advertised to sell ORI's
real property in a foreclosure sale in Clay County, Georgia.
ITEM 3. Bankruptcy or Receivership: See Item 2. The Company and ORI are
not currently subject to any bankruptcy or receivership proceeding, but are
unable to meet their obligations as they come due. While the Company is not
aware of any deficiency which may result from the foreclosure sales of ORI's
real and personal property assets, and believes such assets sufficient to
meet ORI's obligations to the Lender, ORI owes the Lu Group approximately
$2.4 million in secured and unsecured debt and owes trade creditors
approximately $1.5 million in unsecured debt. See Items 5 and 6. The
Company remains guarantor of ORI's debt to the Lender as well as ORI's debt
to the Lu Group. The Company has no means with which to pay any deficiency
on foreclosure on any of ORI's indebtedness under its obligations as
guarantor.
ITEM 4. Changes in Registrant's Certifying Accountant: Registrant has not
changed its certifying accountant. However, due to the inability to make
timely payment of fees for accounting services rendered in respect of the
1996 audit, Registrant has delayed its audit for the year ended December 31,
1997, and is currently unable to state with any assurance when such audit
will be completed.
ITEM 5. Other Events: The following events have occurred with respect to
Registrant:
Several groups have proposed to purchase the approximately 66.3%
control interest in Registrant which is currently held by Wei Ming Lu and
affiliates (collectively "the Lu Group"), all as further disclosed in the
Schedules 13-D of Wei Ming Lu and affiliates, which are incorporated herein
by reference. The Lu Group has been unwilling to invest any additional
capital to the Registrant since January 1997. Effective January 10, 1998,
the Lu Group entered into a Purchase Agreement with Capital Aggregate
Partners, LLC (the "Purchase Agreement"), which Purchase Agreement has not
been performed by Capital Aggregate Partners, LLC. Capital Aggregate
Partners, LLC was unable to attract investors to the project to acquire
majority control of the Registrant from the Lu Group under the terms of the
Purchase Agreement as negotiated with the Lu Group. The Registrant's
management has been informed that in July, 1998, the Lu Group required
return to the Lu Group of the shares of the Registrant's stock, options,
notes and related security documents which had been placed in escrow
pending performance of Capital Aggregate Partners, LLC under the Purchase
Agreement.
Prior to January, 1997 Registrant's management pledged their share-
holding interest in Registrant to secure earlier indebtedness to the Lu
Group, and has received no payment of salary since August 1997. Registrant's
accountants and legal counsel have been paid less than 10% of the amount
owed on outstanding invoices in the past year, and are owed fees from 1994.
Registrant's and ORI's outstanding obligations to trade creditors exceeds
the amount of receivables, and receivables in any event will be first applied
to repayment to the Lender under the Lender's security interests. Registrant
will close its office effective September 4, 1998. See Item 6, Resignation
of Registrant's Directors.
ITEM 6. Resignations of Registrant's Directors: Messrs. Steven H. Miller,
Kenneth W. Tribbey, and Craig E. Gunter, the sole remaining members of
Registrant's and ORI's Boards of Directors, will have resigned immediately
upon the effectiveness of the filing of this Form 8-K, without appointing
successors. Messrs. Miller, Tribbey, and Gunter also will have resigned
their positions as sole officers of the Registrant and ORI. Messrs. Miller,
Tribbey, and Gunter, in stating the cause of their resignation, have stated
that they believe that Registrant's affairs are at an impasse and they
believe only the Lu Group, who holds a 66.3% interest in Registrant's common
stock and $2.4 million in secured and unsecured debt of the Registrant, has
the realistic potential of attracting Debt and/or Equity participation in
the Registrant.
Messrs. Miller and Tribbey have pledged all their interest in the
securities of Registrant to secure prior indebtedness of Registrant to the
Lu Group. Such former officers and directors' employment agreements provide
for certain benefits in connection with resignation or termination, and they
are each owed in excess of $100,000 in back wages, all of which Registrant
is currently unable to pay. In addition, the resigning directors are owed
substantial sums in expenses advanced to Registrant for which they have not
been reimbursed.
Upon the resignation of Messrs. Miller, Tribbey and Gunter, there
being no remaining directors of Registrant, shareholders and creditors are
advised to make inquiry regarding Registrant's affairs with Wei Ming Lu,
c/o Earl Wing, whom are believed by Registrant's management to constitute
control persons in the entities which make up the Lu Group, and whom have
offices located 5660 Greenwood Plaza Blvd., Suite 101, Englewood, Colorado,
80111, telephone number (303) 296-6789, and facsimile number (303) 297-0609.
Registrant's former lease of headquarters offices in Castle Rock, Colorado
has been terminated and its phone will shortly be disconnected.
Copy of this Form 8-K was provided to Mr. Lu, c/o Mr. Wing. Notice
of a shareholders meeting to elect Directors is unknown at this time.
Copies of this Form 8-K will be provided upon request to all shareholders of
Registrant. Copies of this Form 8-K, as well as copies of the Registrant's
financial statements and last Form 10-KSB and subsequent Forms 10-QSB, and
the Schedule 13(D) of the Lu Group can be obtained through the Securities
and Exchange Commission.
ITEM 7. Financial Statements and Exhibits: There are no financial statements
included with this report.
ITEM 8. Changes in Fiscal Year: None
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 hereunto duly authorized.
AMERECO, INC.
By: /s/ Steven H. Miller
Steven H. Miller, President and
Chief Executive Officer
By: /s/ Kenneth W. Tribbey, Executive
Vice President, Chief Financial
Officer, Treasurer, Secretary and
Director
By: /s/ Craig E. Gunter, Assistant
Secretary and Director
