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): January 31, 2011
AVSTAR AVIATION GROUP, INC.
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(Exact name of registrant as specified in its charter)
Colorado 0-30503 76-0635938
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(State or other jurisdiction (Commission File Number) (IRS Employer ID Number)
of incorporation)
3600 Gessner, Suite 220, Houston, Texas 77063
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 965-7582
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
The information included in Item 2.03 of this Current Report on Form 8-K is
also incorporated by reference into this Item 1.01 of this Current Report on
Form 8-K.
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On each of February 22, 2011 and March 11, 2011, AvStar Aviation Group,
Inc. (the "Company") issued a press release reporting increases in revenues for
its year ended December 31, 2010. On May 5, 2011, the Company issued a press
release reporting increases in revenues for its fiscal quarter ended March 31,
2011. These press releases are attached to this Current Report on Form 8-K as
Exhibit 99.1, 99.2 and 99.3.
The information contained in this Item 2.02 and the related exhibits are
"furnished" but not "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF REGISTRANT
On July 1, 2010, the Company issued a convertible promissory note in the
original principal amount of $70,000 (the "First Note") to Henry L. Schulle, a
consultant to the Company ("Holder"), in lieu of cash for consulting services
provided by Holder to the Company. On January 31, 2011, the Company issued a
second convertible promissory note in the original principal amount of $60,000
(the "Second Note") to Holder, in lieu of cash for consulting services provided
by Holder to the Company. The Company believes that the execution and delivery
of the First Note was probably not material enough to require the filing of this
Report, but that upon the execution and delivery of the Second Note, the First
Note and the Second Note (taken as a whole) were material enough to require the
filing of this Report. While the terms of the two notes vary somewhat, these
terms are generally the same from note to note. The following is a description
of the terms of the two notes.
Each of the notes bears regular interest at a rate of 8.5 % per annum. The
notes are unsecured, and each of them is due and payable one year after the date
of their respective issuances. At any time prior to the payment in full of the
entire balance of a note, Holder has the option, upon a 65-days notice, of
converting all or any portion of the unpaid balance of the note into shares of
the Company's common stock at a conversion price discussed hereafter. Each
conversion price for the notes features a "variable" conversion price and also a
"fixed" conversion price of $.04, which will apply if it is less than the
related variable conversion price. The variable conversion price is the closing
trading prices of the Company's common stock for the most recent trading days
preceding the date of exercise; provided, however, that the variable conversion
price has a minimum floor of $.005 per share. In view of the Company's most
recent closing trading prices and the minimum variable conversion price, Holder
could convert the two notes into an aggregate of 26.0 million shares. The notes
contain customary representations and warranties, registration rights, customary
anti-dilution provisions, and customary events of default that entitle Holder to
accelerate the due date of the unpaid principal amount of, and all accrued and
unpaid interest on, the notes.
On May 2, 2011, Holder converted $40,000 of the principal amount of the
First Note into 8.0 million shares of the Company's common stock, leaving an
aggregate outstanding principal amount of the notes equal to $90,000.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.
The information included in Item 2.03 of this Current Report on Form 8-K is
also incorporated by reference into this Item 3.02 of this Current Report on
Form 8-K.
In addition to the issuance to the Holder described above, in April
2011 the Company issued 10.0 million shares of its common stock to the holder of
a convertible promissory note upon conversion of $8,000 of the principal amount
of the related note.
The issuances described in the preceding paragraph and the issuances to
Holder of the notes and the 8.0 million shares of its common stock in connection
with the conversion of a portion of one of the notes are claimed to be exempt
pursuant to Section 4(2) of the Securities Act of 1933 (the "Act") and Rule 506
of Regulation D under the Act. No advertising or general solicitation was
employed in offering these securities. The offering and sale was made only to
two persons, and subsequent transfers were restricted in accordance with the
requirements of the Act.
The securities issued in connection with the acquisition were not
registered under the Securities Act of 1933, as amended, and may not be offered
or sold in the United States in the absence of an effective registration
statement or exemption from registration requirements.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit
Number Exhibit Title
10.1 8.5% Convertible Note dated July 1, 2010 made payable by the Company to
Henry L. Schulle in the original principal amount of $70,000
10.2 8.5% Convertible Note dated January 31, 2011 made payable by the
Company to Henry L. Schulle in the original principal amount of $60,000
99.1 Press Release of AvStar Aviation Group, Inc. dated February 22, 2011
entitled "AvStar Aviation Group, Inc. Announces 2011 Revenue Increases
Spur on Plans for New Air Routes; Operations from Sheltair-North
Commence; Aircraft Charters, LLC Acquisition Update."
99.2 Press Release of AvStar Aviation Group, Inc. dated March 11, 2011
entitled "AvStar Aviation Group, Inc. Releases Overview of Operations
and 20% Revenue Increase."
99.3 Press Release of AvStar Aviation Group, Inc. dated May 5, 2011 entitled
"AvStar Aviation Group, Inc. Announces Revenue Increases, Addition to
Air Fleet, and Update of DOT Commuter Authority Status."
SIGNATURE
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.
AVSTAR AVIATION GROUP, INC.
Date: May ____, 2011 /s/ Clayton I. Gamber
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Clayton I. Gamber,
Chief Executive Officer & President