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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) February 20, 1997
AIM GROUP, INC.
(Exact name of registrant as specified in charter)
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Delaware 33-82468 13-3773537
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(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
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2001 West Sample Road, Suite 300
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Pompano Beach, Florida 33064
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(Address of principal executive offices)
(954) 972-9339
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(Registrant's telephone number, including area code)
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(Former Name or Former Address, if Changed Since Last Report)
This document contains 3 pages.
There are no exhibits to this Report.
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INFORMATION TO BE INCLUDED IN REPORT
Item 5. Other Events
Series A 3.5% Convertible Notes
In a Form 8-K filed with the Commission on February 7, 1997, the Company
reported that Mr. Bernard Kossar, a Director of the Company, had initiated a
lawsuit against the Company, alleging a default by the Company on $300,000 of an
aggregate outstanding principal balance of $1,500,000 in unsecured, Series A
3.5% Convertible Notes which had a maturity date of December 31, 1996 (the
"Notes"). Management believes the Company has meritorious defenses and
counterclaims and intends to vigorously defend the Company's interests.
The Company and each of the holders of the Notes (the "Noteholders"), including
Mr. Kossar until his filing of the lawsuit, had informally agreed to an
extension of the maturity date of the Notes while the parties pursued
negotiations to restructure the terms of the Notes, including an extension of
the maturity date. As of this date, the Company has not been successful in
reaching an agreement with the Noteholders to restructure the Notes. The notes
are unsecured, and since January 1, 1997, interest has accrued on the Notes at a
rate of 10% per annum.
The Noteholders include Mr. Kossar, a Director, Northern Federal Minerals, LLC,
an entity affiliated with Joseph Ranzini, another Director, and Paul Arena, a
former Director and beneficial owner of approximately 13% of the issued and
outstanding common stock of the Company. Collectively, these three individuals
hold or control $750,000 (or 72%) of the aggregate outstanding principal balance
of the Notes. The third Noteholder is LDD Capital, LLC, a principal of which is
an officer of the Company.
The Company does not have sufficient cash flow from operations to pay out the
principal amount of the Notes; however, management believes the Company has
adequate cash flow from operations to continue to make regular interest payments
on the Notes as they become due, if the Notes are restructured. The Company
continues to seek alternative sources of financing to pay off the outstanding
Notes.
Reserve Against Asset
Based on a recent analysis of the market for industrial mineral fillers, the
company intends to establish a material reserve against the sole asset of its
wholly-owned subsidiary, United Minerals Corporation (Arizona). The asset, a
mineral leasehold interest in a mining property, the Viva Luz Mine in Arizona,
from which the Company surface mines and processes a silica-kaolinite material
known as Klannerite(R), had a book value as of December 31, 1995 of
approximately $4 million. The Company had anticipated that Klannerite(R) would
have greater potential commercial applications as an industrial mineral filler
in the paint/coatings and plastics compounding industries and as an energy
saving coating. However, the Company has experienced disappointing results in
its testing of these applications of the material. Management believes that the
reserve is necessary to reflect a current assessment of the more limited
commercially exploitable applications of Klannerite(R) and the fact that the
Company has reallocated limited financial resources away from research and
development of alternative, commercial applications of Klannerite(R). A final
determination of the amount of the reserve will be made upon completion of the
annual audit of the Company's consolidated financial statements for the year
ended December 31, 1996. The reserve, while material, is not expected to have a
material adverse effect on the continuing operations of the Company.
The Company, through its wholly-owned operating subsidiary, United Minerals
Corporation (Arkansas) operates an industrial mineral surface modification plant
in Malvern, Arkansas.
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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.
AIM GROUP, INC.
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Registrant
Date: February 20, 1997 By: Iain J. Richmond
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Iain J. Richmond, President
