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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 5, 1998
ADVANCED MATERIALS GROUP, INC.
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(Exact name of registrant as specified in its charter)
Nevada 0-16401 33-0215295
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
20211 S. Susana Road, Rancho Dominguez, CA 90221
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (310) 537-5444
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(Former Name or Former Address, If Changed Since Last Report)
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ITEM 5. OTHER MATTERS
Reference is made to Item 3 of Registrant's Annual Report on Form 10-KSB
for the year ended November 30, 1997. On October 5, 1998, a judgment was
entered, in the United States District Court for the Eastern District of
California, against the Registrant's Condor Utility Products, Inc. subsidiary
(Condor) for breach of a requirements contract. The verdict, in favor of Vern
and Shirley Auten and d/b/a Aglo Plastics Co., was in the amount of $382,500.
The Autens may also be entitled to pre-judgment interest and attorney's fees.
These amounts cannot be reasonably determined at this time.
Condor prevailed on a related patent infringement claim. The jury was
unable to reach a verdict in a separate claim by the Autens against Condor
and Mr. Gary Valiska, the founder of Condor, for intentional infliction of
emotional distress, and that claim has been remanded to state court for
retrial.
The breach of contract and emotional distress actions were originally
filed prior to the Registrant's acquisition of Condor in 1993. As part of the
stock purchase agreement, the Registrant negotiated an indemnification
agreement with Mr. Valiska, which requires Mr. Valiska to indemnify the
Registrant for 75% of any judgment. At this time it is uncertain what, if
any, amounts may be collected under the indemnification agreement.
The Registrant is currently reviewing all options, including the
possibility of an appeal. The Registrant firmly believes that the facts do
not support either the verdict or the amount of damages in this case.
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.
Dated: October 9, 1998 ADVANCED MATERIALS GROUP, INC.
By: /s/ J. DOUGLAS GRAVEN
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J. Douglas Graven,
Vice President, Chief Financial
Officer and Secretary
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