<PAGE>
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
(x) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Period Ended September 30, 1996.
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Transition Period From to
------------ ---------------
Commission file number 33-82468
AIM GROUP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3773537
- -------------------------------- --------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2001 W. Sample Road, Suite 300
Pompano Beach, Florida 33064
- -------------------------------- --------------------------------
(Address of principal executive offices) (Zip Code)
(954)972-9339
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(Registrant's telephone number, including area code)
Not applicable
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(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to
such filing requirement for the past 90 days. Yes X No
Applicable only to Issuers Involved in Bankruptcy
Proceedings During the Preceding Five Years
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by the court. Yes No
---- ----
Applicable Only to Corporate Issuers
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, $.01 Par Value 3,980,053 shares as of October 30, 1996.
<PAGE>
Index
AIM Group, Inc. and Subsidiaries
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets - September 30, 1996 and 1995, and
December 31, 1995
Condensed consolidated statements of income - Three months ended September
30, 1996 and 1995; Nine months ended September 30, 1996 and 1995
Condensed consolidated statements of cash flows - Nine months ended
September 30, 1996 and 1995
Notes to condensed consolidated financial statements - September 30, 1996
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Part II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
Part 1. Financial Information
AIM Group, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, September 30, December 31,
1996 1995 1995
-------- ------- -------
<S> <C> <C> <C>
ASSETS (Unaudited) (Unaudited) (Note)
CURRENT ASSETS
Cash $ 98,844 $ 30,061 $ 260,280
Accounts receivable
Trade 533,470 145,088 691,457
Other 10,511 0 9,760
Inventories 185,141 112,214 153,029
Prepaid expenses 31,374 27,869 24,576
------------- ------------- ------------
Total current assets 859,339 315,232 1,139,102
PROPERTY, PLANT AND EQUIPMENT 718,499 475,255 598,579
Less allowances for depreciation (151,421) (83,664) (98,163)
------------- ------------- ------------
567,079 391,591 500,416
RESOURCE PROPERTY 3,999,567 3,985,325 3,994,868
OTHER ASSETS 145,809 94,489 68,228
------------- ------------- ------------
$ 5,571,794 $ 4,786,637 $ 5,702,614
============= ============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 334,930 $ 526,421 $ 369,924
Receivable financing liability 210,638 0 475,215
Current portion of long-term debt 21,543 310,090 12,201
Accrued expenses 50,381 72,530 94,532
------------- ------------- ------------
Total current liabilities 617,492 909,041 951,872
LONG-TERM DEBT, less current portion 79,475 0 72,232
CONVERTIBLE NOTES PAYABLE 1,050,000 0 750,000
STOCKHOLDERS' EQUITY
Preferred Stock; 1,000,000 shares authorized; $1 par value;
no shares issued or outstanding. 0 0 0
Common stock; 6,000,000 shares authorized; $.01 par value;
4,193,465 shares issued and 3,980,053 shares outstanding
September 30, 1996, 3,898,929 shares issued and 3,685,516
outstanding September 30, 1995 and 4,113,465 shares issued
and 3,900,053 outstanding December 31, 1995. 41,935 38,989 41,135
Additional paid in capital 4,232,250 4,022,185 4,150,259
Common stock held in treasury - 213,413 shares (11,575) (11,575) (11,575)
Common stock subscription received - 80,000 shares 0 0 82,792
Accumulated deficit (437,783) (172,003) (334,101)
------------- ------------- ------------
3,824,827 3,877,596 3,928,510
------------- ------------- ------------
$ 5,571,794 $ 4,786,637 $ 5,702,614
============= ============= ============
</TABLE>
Note: The balance sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed consolidated financial statements.
<PAGE>
AIM Group, Inc. and Subsidiaries
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended September 30, Nine Months Ended September 30,
-------------------------------------------------------------------------
1996 1995 1996 1995 1995
------------ ------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
(Actual) (Actual) (Actual) (Actual) (Pro forma)
Net sales $ 645,871 $ 531,687 $ 2,500,001 $ 1,319,170 $ 1,740,635
Costs and expense
Cost of products sold 437,888 382,556 1,685,408 907,745 1,190,482
Selling and administrative expenses 271,020 193,089 747,289 484,193 608,257
Interest 13,050 15,207 112,143 42,923 55,474
Depreciation and amortization 20,488 15,178 58,843 31,052 44,842
------------ ------------- ------------- ------------ -------------
742,446 606,030 2,603,683 1,465,913 1,899,055
------------ ------------- ------------- ------------ -------------
Earnings (loss) before taxes (96,575) (74,343) (103,682) (146,743) (158,420)
Income taxes 0 0 0 0 0
------------ ------------- ------------- ------------ -------------
Net earnings (loss) $ (96,575) $ (74,343) $ (103,682) $ (146,743) $ (158,420)
============ ============= ============= ============ =============
Net earnings per share $ (0.024) $ (0.020) $ (0.026) $ (0.059) $ (0.064)
============ ============= ============= ============ =============
Weighted average shares outstanding 3,980,053 3,685,516 3,971,262 2,470,840 2,470,840
============ ============= ============= ============ =============
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
AIM Group, Inc. and Subsidiaries
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
--------------------------------------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
(Actual) (Actual) (Actual) (Actual)
CASH FLOWS FROM OPERATIONS $ 79,341 $ 84,792 $ (275,822) $ (39,809)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash balances of merged entities 0 0 0 92,759
Purchases of property and equipment (34,012) (10,696) (119,920) (20,486)
(Increases) decreases in other assets and resource property (4,159) (23,662) (82,280) (46,687)
---------- ---------- ---------- ----------
Net cash provided by investing activities (38,171) (34,358) (202,200) 25,586
---------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Receipt of proceeds from convertible note payable 0 0 300,000 0
Net change in debt 10,355 0 16,586 0
Repayment of advances by affiliated company 0 0 0 19,750
---------- ---------- ---------- ----------
Net cash provided by financing activities 10,355 0 316,586 19,750
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH $ 51,525 $ 50,434 $ (161,436) $ 5,527
========== ========== ========== ==========
<CAPTION>
<S> <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Non cash effects of merger as of March 31, 1995
Increases in assets and liabilities
Trade accounts receivable $ 129,723
Inventories 74,022
Prepaid expenses 19,417
Property and equipment 398,914
Resource property 3,947,792
Other assets 45,666
Accounts payable (368,500)
Loans payable (77,500)
Accrued expenses (2,764)
----------
Subtotal 4,166,770
Add cash assumed with merger (see above) 0
Receivables from affiliates - eliminated upon merger (210,030)
----------
$ 3,956,740
==========
Issuance of common stock $ 4,061,074
Cost of treasury stock (11,575)
----------
$ 4,049,499
==========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
AIM Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
September 30, 1996
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the nine months ended September 30, 1996 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1996. For further information, refer to the financial statements
and footnotes thereto included in the AIM Group, Inc. annual report on FORM
10-KSB for the period ended December 31, 1995.
NOTE B - MERGER AND PRO FORMA FINANCIAL INFORMATION
On March 23, 1995, the shareholders of Advanced Industrial Minerals, Inc. (AIM),
HeatShield Technologies, Inc. (HTI), and HeatShield Funding Group, L.P. (HFG),
approved the merger of the entities into AIM Group, Inc. (the Company) effective
March 31, 1995.
Pursuant to the merger agreement, AIM was merged with the Company, which became
the surviving Company. HTI became a wholly-owned subsidiary of the Company. The
combination of these companies was treated as a purchase. For accounting
purposes the Company and HTI were treated as acquirers and AIM was treated as
the target company. The purchase price of AIM, based on its appraised value by
independent appraisal was $3,710,000.
The merger resulted in the issuance of 3,898,930 shares of AIM Group, Inc.
common stock in exchange for all of the outstanding common stock of AIM, HTI,
and the $1,000,000 of preferred stock controlled by HFG.
The pro forma financial information for the nine months ended September 30,
1995, presented for information and analysis purposes, assumes that the
Companies were merged effective January 1, 1995 for comparative purposes.
NOTE C - ACCOUNTS RECEIVABLE
As of September 30, 1996 the Corporation had net accounts receivable from trade
sales of $320,722. This results from outstanding accounts receivable in the
amount of $533,469 as shown in the current asset section less $210,638 in
receivables factored as stated in the liability section. In addition the
Corporation has other receivables of $10,510 for rents due from a non affiliated
company (see Note I - Related Parties Transactions) and a small refund due from
insurance premiums.
NOTE D - INVENTORY
Inventory on hand from all of its subsidiaries was valued at $185,140. Inventory
is stated at cost which is lower than market.
<PAGE>
AIM Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited) - Continued
September 30, 1996
NOTE E - RESOURCE PROPERTY
The Corporation purchased the assets of Advanced Industrial Minerals, Inc. which
mainly consisted of a mineral lease with New Mexico and Arizona Land Co.
(lessor) and which calls for the Corporation to pay a minimum of $5,000 USD in
March each year for the term of the lease. The Corporation recorded the purchase
of the resource property at the independent appraised value and its associated
costs of developing the property.
The carrying value of the resource properties including development costs and
prepaid royalties are as follows:
1996
------
Resource Property - (Beginning) $ 3,939,992
Prepaid Royalties (Beginning) 54,575
Minimum Annual Prepaid Royalty - 1996 5,000
Less 1995 production royalty Paid 0
-----------
Prepaid Royalties (Ending) 59,575
-----------
Resource Property (Ending) $3,999,567
NOTE F - ACCOUNTS PAYABLE
The Corporation has accounts payable from trade activities as of September 30,
1996 in the amount of $334,930. The Corporation factors its receivables; as of
September 30, 1996 the Corporation was advanced $210,638 against its
receivables.
NOTE G - LOANS PAYABLE - LONG TERM DEBT
The Corporation's subsidiary United Minerals Corporation has a mortgage secured
by the plant and building in the amount of $62,035 which is payable in monthly
installments of $900 at 10.25% and loans secured by vehicles and equipment of
approximately $17,610 payable in monthly installments of $756 including interest
of 9.5% to 14.2%.
NOTE H - CONVERTIBLE NOTES PAYABLE
In February, 1996 the Corporation completed a Private Placement in the form of
Convertible Notes having an aggregate value of $1,050,000 USD with three related
party investors (see Related Parties ). The unsecured notes are due on December
31, 1996 and carry a three year conversion feature at the option of the holders
to convert the face value of the notes into common shares of the Corporation at
a price of $1.10 if converted on or before December 31, 1996; $1.35 on or before
December 31, 1997; $1.60 on or before December 31, 1998. In addition the
Corporation has the right to convert the notes into common shares upon
completion of an offering of 1,500,000 common shares at a minimum price of $1.50
per share. The Corporation has used the proceeds from these notes to repay other
indebtedness of the Corporation which had become due during the period. The
balance of the private placement was used for working capital purposes.
<PAGE>
AIM Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited) - Continued
September 30, 1996
NOTE H - CONVERTIBLE NOTES PAYABLE - Continued
The Corporation's convertible notes having an outstanding principal balance of
$1,050,000 (the "Notes") will mature on December 31, 1996. Management believes
that projected cash flow from operations will not be sufficient to pay off the
Notes, upon maturity. The Corporation and the holders of the Notes, each of
which are related parties (including three officers and directors of the
Corporation), are currently engaged in negotiations to either extend the
maturity of the existing Notes for one year in consideration for an increase in
the stated interest rate on the Notes or some other modification of the terms of
the Notes. The Corporation is also actively seeking financing to provide
necessary capital to pay off the Notes. There can be no assurance that the
Corporation will be successful in its current efforts to restructure the terms
of the Notes to extend the maturity date or to obtain sufficient financing from
third parties to pay the Notes. In the event the Corporation is unable to
restructure the Notes or to secure such additional financing, the Corporation
would be unable to pay the Notes upon maturity and would be in default under the
terms of the Notes.
NOTE I - RELATED PARTY TRANSACTIONS
The following transactions of the Corporation are identified as transactions
with related parties.
Private Placement of Convertible 3 1/2 % Promissory Notes
In February, 1996 the Corporation completed the private placement in the form of
3 year Convertible 3 1/2 % Promissory Notes having a face value of $1,050,000.
(See previous Note H -CONVERTIBLE NOTES PAYABLE for description). The following
are related individuals and affiliated concerns that have purchased the
Convertible Notes:
Northern Federal Minerals LLC: Paul R. Arena, an officer and former director and
Joseph L. Ranzini a newly appointed director of the Corporation are a principal
and an affiliate respectively, of this Michigan limited liability corporation.
During December, 1995 Northern Federal Minerals LLC subscribed for $450,000 of
the private placement of $1,050,000 convertible promissory notes issued by the
Corporation.
LDD Capital LLC: Shawn P. Durand, an officer of the Corporation, is a principal
in LDD Capital LLC, a Minnesota limited liability corporation, which corporation
subscribed for $300,000 of the private placement of $1,050,000 convertible
promissory notes issued by the Corporation.
Bernard R. Kossar: Mr. Kossar, a director of the Corporation, subscribed for
$300,000 of the private placement of $1,050,000 convertible promissory notes
issued by the Corporation.
Accounts Receivable - Affiliate
A director, a former director, and an advisory board member of AIM Group are
principals in Gulfstream Capital Advisors, Inc. ("Gulfstream"), a non affiliated
concern. During 1995 the Corporation entered an arrangement to provide office
space and communication services and other office facilities to Gulfstream at a
rental pro-rated for the space used through November 1995. As at September 30,
1996 Gulfstream was indebted to the Corporation in the amount of $9,760.
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
The Corporation had no revenues from operations for the first quarter of the
prior year before the mergers took place hence the comparison with 1995 (prior
year period) including first quarter results is not meaningful. The 1995 Actual
results reflect the fact that the mergers were not consummated until March 31,
1995. The Pro-forma basis for the results for the Corporation are shown as if
the mergers had occurred effective January 1, 1995.
Results of Operations - Actual
Net sales for the third quarter 1996 increased 21% to $645,871 from $531,687 for
the corresponding period in 1995. Net sales for the nine months to September 30,
1996 increased 89% to $2,500,001 compared with $1,319,170 Actual sales for the
comparable period in 1995 (see pro-forma results for nine month comparison).
Management attributes the increased growth during the third quarter to sales to
new customers. All of the Corporation's products were sold to customers for use
as fillers in plastic compounds. The majority of sales were of surface modified
minerals sold to the plastics compounding industry. A nominal portion of sales
were production size samples to customers still evaluating the Corporation's
products.
The Corporation continues to concentrate on expansion of the customer base for
its products by providing technical solutions and samples to prospective sales
leads to reduce its dependence on its major customer. Management continues to
investigate possibilities for integration with mineral suppliers and to expand
the range of surface modified products offered.
The gross margin for the third quarter increased from 28% for the corresponding
quarter in 1995 to 32% in the second quarter 1996. This is attributed to a
higher operating volume. For the year to date, gross margin is 33% compared to
31% for the same period in the prior year.
Selling and administrative expenses for the third quarter were $277,301 or 43%
of sales, compared to $193,089 or 36% of sales in 1995; this represents an 8%
increase over the comparable period in 1995 which is due to increased cost of
expanding technical sales and marketing efforts. For the year to date, selling
and administration expenses of $753,570 represented 30% of sales compared with
$484,193 or 37% of sales for the prior year period. Management attributes this
improvement to the fact that continuing operations, post merger, do not include
many of the one time, merger related, expenses of the prior year.
Interest expenses were $13,050 and $15,207 respectively for the three months
ended September 30, 1996 and 1995. This represents for 1996 an decrease to 2% of
sales, from 3% of sales the prior year, which is a reflection of the
Corporation's decreased use of factoring of receivables to provide working
capital. For the nine months, year to date, comparing 1995 with 1996, Interest
expenses increased from 3% of sales to 4% of sales. Depreciation for the third
quarter increased nominally from $15,178 to $20,488 reflecting equipment
additions. For the nine months year to date, depreciation continues to represent
2% of sales.
The Net Loss of $96,575 for the three months ended September 30, 1996 represents
a loss of two and four tenths cents ($0.024) per share based on the weighted
average number of shares outstanding during the period. For the comparable
period in the prior year the Net Loss was $74,343 and represented a loss of two
cents ($0.020) per share.
For the nine months ended September 30, 1996 the Net Loss was $103,682, two and
six tenths of a cent ($0.026) per share, compared with $146,743, six cents
($0.059) per share for the nine months ended September 30, 1995 based on the
weighted average number of shares outstanding during the respective periods.
<PAGE>
Results of Operations - Pro-Forma
On a Pro-Forma basis Sales for the nine months to September 30, 1996 increased
43% from $1.74 million to $2.5 million. Gross margin increased 1%, to 33% for
the period. Management attributes the increase to a strong first quarter and
increased marketing effort.
Selling and administrative expenses were $753,570 and $608,257 for the nine
months ended September 30, 1996 and 1995 respectively. This represents a
decrease, as measured as a percentage of sales, to 30% from 35%.
Interest charges for the first nine months of 1996, at $112,193 or 4% of sales,
showed an increase from $55,474 or 3% of sales for the prior year period.
Depreciation was $57,973 for the period or 2% of sales; for the comparable
period in 1995 depreciation was $44,842.
The Corporation showed a loss before tax of $109,143, or (as below) two point
six cents ($0.026) per share outstanding. The loss per share for the comparable
period in 1995 was $158,420 or six point four cents ($0.064) per share, based on
the average number of shares outstanding during the period.
Liquidity and Sources of Capital
Cash flow from operations was $56,985 for the three months ended September 30,
1996 and a negative $155,976 for the nine month period ended September 30, 1996
compared with $50,434 for the third quarter and $5,527 for the corresponding
three month period in the previous year. The operations of the United Minerals
Corporation (UMC) subsidiary are profitable and have produced sufficient pre tax
income to absorb the expenses of the Corporation's head office over the first
nine months of 1996. As of September 30, 1996 the Corporation had working
capital of $241,847 compared with working capital of $187,230 as at December 31,
1995. During the period the Corporation paid down a substantial portion of the
factored receivables. The balance factored at the end of the period was $200,958
compared with $475,215 as at December 31, 1995. Working capital is considered by
management to be sufficient to meet the Corporation's operational needs for the
balance of the year, excluding the repayment of the Notes described below.
The Corporation's convertible notes having an outstanding principal balance of
$1,050,000 (the "Notes") will mature on December 31, 1996. Management believes
that projected cash flow from operations will not be sufficient to pay off the
Notes, upon maturity The Corporation and the holders of the Notes, each of which
are related parties (including three officers or directors of the Corporation),
are currently engaged in negotiations to either extend the maturity of the
existing Notes for one year in consideration for an increase in the stated
interest rate on the Notes or some other modification of the terms of the Notes.
The Corporation is also actively seeking financing to provide necessary capital
to pay off the Notes. There can be no assurance that the Corporation will be
successful in its current efforts to restructure the terms of the Notes to
extend the maturity date or to obtain sufficient financing from third parties to
pay the Notes. In the event the Corporation is unable to restructure the Notes
or to secure such additional financing, the Corporation would be unable to pay
the Notes upon maturity and would be in default under the terms of the Notes.
The Corporation has continued its factoring arrangement which provides for cash
advances against outstanding invoices to customers. Management has worked to
reduce the use of factoring; however, the recent seasonal slowdown has
necessitated a re-negotiation of the factoring contract through December 31,
1996. Management is discussing with several lenders a working capital line to
replace the current factoring arrangement.
Due to the seasonal slowdown the Corporation has decided to defer the previously
planned expenditures to increase process efficiency. Additional capacity from
plant upgrades will be considered as order volume returns to previous levels.
<PAGE>
Part II Other Information
Item 1. Legal Proceedings
The Corporation is being sued in the Tennessee Chancery Court for non payment of
invoices relating to supply of materials. The Corporation contends the material
supplied was contaminated and not to specification. The Corporation is
vigorously defending its action and is counter claiming for damages. Subsequent
to this claim the Corporation's customer and the ultimate customer have filed
intervenor suits against the Corporation and the material supplier. Management
is of the opinion that the cost of resolution of the claims will not have any
material adverse effect on the financial condition of the Corporation.
The Corporation has been named as defendant in an action filed on July 8, 1996
in the Chancery Court of Hot Springs County, Arkansas by the former plant
manager of the UMC facility. The plaintiff has alleged breach of employment
contract and wrongful termination. On August 14, 1996 the Chancery Court of Hot
Springs County, Arkansas granted the Corporation's request to present the case
to arbitration in the State of Florida. The Corporation's management is of the
opinion the suit against it is without merit and that the Corporation has
defenses.
Item 2. Changes in Securities
The Corporation received shareholder approval to extend the expiration date of
445,586 options and warrants which had expired on December 31, 1995 and April
14, 1996 until December 31, 1996. The extension of these options and warrants
was approved by the shareholders at the Annual Meeting of Shareholders which was
adjourned from June 20, 1996 to July 10, 1996.
The total issued common share balance as of September 30, 1996 was 4,113,465
common shares, of which 213,412 shares are held in treasury, and 3,980,053 are
issued and outstanding.
In addition, 954,000 and 478,495 common shares respectively are reserved for
issuance upon conversion of the Convertible Notes and upon the exercise of all
warrants and options.
Item 3. Defaults upon Senior Securities
The Corporation is not in default of any senior securities. (See "Liquidity and
Sources of Capital" and Note H to the Unaudited Financial Statements of the
Corporation for the Quarter Ended September 30, 1996, with respect to
outstanding convertible notes payable which mature on December 31, 1996.)
Item 4. Submission of Matters to a Vote of the Security Holders
The following items were submitted to the shareholders for vote at the Annual
Meeting of Shareholders adjourned from June 20, 1996 to July 10, 1996.
1. To elect the Directors for the ensuing year.
Name Votes FOR Votes AGAINST ABSTAIN
- --------------------------------------------------------------------
D. M. Hartley 2,812,241 111,926 213,427
J. Johnston 3,014,651 111,926 10,819
B. Kossar 1,590,742 1,535,764 11,017
M. McManus 3,014,651 111,855 10,819
Note:Two nominees, P. Arena and J. Austin, withdrew their names from
nomination as directors prior to the Annual Meeting of Shareholders.
The Corporation filed a Form 8K with respect to such voluntary
withdrawal from nomination and resignation as Directors on July 17,
1996. (See Item 6 "Exhibits and Reports on From 8K")
<PAGE>
2. To appoint Auditors for the ensuing year and to authorize the Directors
to fix the remuneration of the Auditors.
3. To approve the amendment to the Certificate of Incorporation to increase the
maximum number of authorized shares of common stock for issuance from
6,000,000 to 12,000,000 shares.
4. To consider and approve the extension from December 31, 1995 and April 14,
1996 to December 31, 1996 of the expiry date of 445,586 warrants and options,
subject to the approval of the Vancouver Stock Exchange.
5. To consider and approve the issuance to a newly appointed director of 25,000
incentive options.
6. To consider and approve a private placement or other issuance(s) of an amount
of shares or other securities that is equal to or greater than 20% of the
issued share capital of the Corporation, at such price or prices and on such
terms as are acceptable to the Vancouver Stock Exchange.
7. To consider and approve a stock option plan.
Voting on items 2 through 7 was as follows:
Item Number Vote FOR Vote AGAINST ABSTAIN
- -------------------------------------------------------------------
2 3,020,737 116,710 147
3 2,663,104 473,886 604
4 1,487,022 446,096 318,154
5 2,238,899 570,956 327,739
6 2,027,171 775,847 334,576
7 634,089 1,461,546 318,396
All of the above items except for item 7 were ratified by the shareholders.
Prior to the Annual Meeting, two directors withdrew their names from the
nomination due to personal reasons. The shareholders did not approve the stock
option plan.
Item 5. Other Information
During the third quarter the Company had the following changes to its board of
directors. In July, prior to the Company Annual Shareholders Meeting, Mr. Paul
Arena and Mr. James Austin tendered their resignations as directors and withdrew
their names for re-election to the Board of Directors due to personal reasons.
In September, Mr. Joseph Ranzini was appointed to the Board of Directors of the
Company. Effective November 6, 1996, Mr. Michael A. McManus, Jr. resigned from
the Board of Directors due to other business commitments.
The Corporation's shares trade on the Vancouver Stock Exchange, Vancouver, B.C.,
Canada. The price of the shares is quoted in U.S. dollars and U.S. shareholders
can locate the Corporation's common stock under the symbol AGDU.V and for
Canadian shareholders, the symbol is AGD.U.
Item 6. Exhibits and Reports on Form 8-K
The Corporation filed a Form 8-K on July 17, 1996 with respect to the voluntary
withdrawal from nomination for re-election of two directors.
<PAGE>
Signatures
Pursuant to the requirement 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.
AIM GROUP, INC.
(Registrant)
Date November 11, 1996 /s/ Iain J. Richmond
------------------------ ------------------------------------------
Iain J. Richmond
President
Date November 11, 1996 /s/ Shawn P. Durand
------------------------ ------------------------------------------
Shawn P. Durand
Principal Financial Officer
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> Jan-01-1996
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0
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