U.S. SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                              ------------------


                                  FORM 10-QSB

               [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                     For the Quarter Ended June 30, 1998

              [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                        Commission File Number 33-82468
                        -------------------------------


                                AIM GROUP, INC.
      ------------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

         2001 W. Sample Road (Suite 300), Pompano Beach, Florida 33064
      ------------------------------------------------------------------
             (Address of registrant's principal executive office)

                                 954-972-9339
      ------------------------------------------------------------------
                        (Registrant's telephone number)

                  Delaware                      13-3773537
      ------------------------------------------------------------------
       (State of Incorporation)    (I.R.S. Employer Identification No.)


Check  whether  the issuer (1) filed all  reports to be filed by Section 13 or
15(d) of the  Exchange Act during the past 12 months and (2) has been subject
to such filing requirements for the past 90 days. Yes [X]  No [ ]

The  number  of  shares of common  stock  outstanding  as of July 31, 1998 was
3,980,053

Transitional Small Business Disclosure Format: [ ] Yes    [X] No


<PAGE>

                        AIM GROUP, INC.AND SUBSIDIARIES

                                     INDEX

                                                                  Page(s)
                                                                  -------
PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements (Unaudited)

            Condensed Consolidated Balance Sheets -
             June 30, 1997 and December 31, 1996                     3

            Condensed Consolidated Statements of
             Operations - Three Months and Six
             Months Ended June 30, 1997 and 1996                     4

            Condensed Consolidated Statements of
             Cash Flows - Three Months and Six 
             Months Ended June 30, 1997 and 1996                     5


            Notes to Condensed Consolidated
             Financial Statements                                    6


Item 2.     Management's Discussion and Analysis of
             Financial Condition and Results of
             Operations                                             7-9

PART II.    OTHER INFORMATION

Item 4.     Submission of Matters to a Vote of                      10
             Security Holders

Item 5      Other Information                                       11

Item 6.     Exhibits and Reports on Form 8-K                        11


SIGNATURES                                                          12


                                      2

<PAGE>

PART 1.     FINANCIAL INFORMATION

                       AIM GROUP, INC. AND SUBSIDIARIES

                    CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                             June 30,       December 31,
                                                               1998             1997
                                                           ------------     ------------
                                                            (Unaudited)        (Note)
<S>                                                        <C>               <C>
ASSETS
CURRENT ASSETS
  Cash                                                     $    38,371      $     9,898
  Accounts receivable
    Trade                                                      424,595          368,832
  Inventories                                                  134,694          202,155
  Prepaid expenses                                              12,068            6,967
                                                           ------------     ------------
      Total current assets                                     609,728          587,852

PROPERTY, PLANT AND EQUIPMENT                                  881,606          809,396
Less allowances for depreciation                              (275,486)        (236,685)
                                                           ------------     ------------
                                                               606,120          572,711

  RESOURCE PROPERTY                                          4,021,523        4,000,373

OTHER ASSETS                                                    68,048           40,511
                                                           ------------     ------------
                                                           $ 5,305,419      $ 5,201,447
                                                           ============     ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable                                         $   615,820      $   630,692
  Receivable financing liability                               267,222          277,441
  Note payable                                                 150,000                0
  Current portion of long-term debt                            149,068           80,954
  Accrued expenses                                              35,781           46,062
                                                           ------------     ------------
    Total current liabilities                                1,217,891        1,035,149

LONG-TERM DEBT, less current portion                            71,819           93,091

CONVERTIBLE NOTES PAYABLE                                    1,050,000        1,050,000

STOCKHOLDERS' EQUITY
  Preferred Stock; 1,000,000 shares authorized;
    $1 par value; no shares issued or outstanding                    0                0
  Common stock; 12,000,000 shares authorized;
    $.01 par value; 3,980,053 shares issued and
    3,971,107 shares outstanding at December 31, 1997
    and  June 30, 1998.                                         39,801           39,801
  Additional paid in capital                                 4,222,809        4,222,809
  Common stock held in treasury - 8,946 shares                  (6,876)          (6,876)
  Accumulated  deficit                                      (1,290,025)      (1,232,527)
                                                           ------------     ------------
                                                             2,965,709        3,023,207
                                                           ------------     ------------
                                                           $ 5,305,419      $ 5,201,447
                                                           ============     ============
</TABLE>

Note: The balance sheet at December 31, 1997 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.


                                       3

<PAGE>

                       AIM GROUP, INC. AND SUBSIDIARIES

                           STATEMENT OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                 Three Months Ended             Six Months Ended
                                                      June 30                      June 30
                                            ---------------------------   --------------------------
                                                1998           1997           1998          1997
                                            ------------   ------------   ------------   -----------
<S>                                         <C>            <C>            <C>            <C>       
Net sales                                   $   548,422    $   615,478    $ 1,326,611    $1,187,570
Costs and expenses
  Cost of products sold                         417,763        486,939        964,118       915,477
  Selling and administrative expenses           147,247        168,131        270,602       395,107
  Interest                                       51,184         48,861        105,873        98,643
  Depreciation and amortization                  19,401         19,400         38,801        38,801
                                            ------------   ------------   ------------   -----------
                                                635,595        723,331      1,379,394     1,448,028
                                            ------------   ------------   ------------   -----------
Earnings (loss) before taxes                    (87,173)      (107,853)       (52,783)     (260,458)

Income taxes                                          0              0              0             0
                                            ------------   ------------   ------------   -----------
Net earnings (loss)                         $   (87,173)   $  (107,853)   $   (52,783)   $ (260,458)
                                            ============   ============   ============   ===========

Net earnings per share                      $    (0.022)   $    (0.027)   $    (0.013)   $   (0.066)
                                            ============   ============   ============   ===========

Weighted average shares outstanding           3,971,107      3,964,052      3,971,107     3,971,408
                                            ============   ============   ============   ===========
</TABLE>

See notes to condensed consolidated financial statements.


                                       4

<PAGE>

                       AIM GROUP, INC. AND SUBSIDIARIES

                           STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                 Three Months Ended             Six Months Ended
                                                      June 30                      June 30
                                            ---------------------------   --------------------------
                                                1998           1997           1998          1997
                                            ------------   ------------   ------------   -----------
<S>                                         <C>            <C>            <C>            <C>       
CASH FLOWS FROM OPERATIONS                  $   (94,857)   $     8,902    $   (47,472)   $  (12,839)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment           (47,316)        (7,050)       (72,210)       (7,050)
  Increases in other assets and
    resource property                           (34,192)             0        (48,687)       (4,327)
                                            ------------   ------------   ------------   -----------
   Net cash provided by investing
     activities                                 (81,508)        (7,050)      (120,897)      (11,377)
                                            ------------   ------------   ------------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net change in debt                            184,714        (37,539)       196,842       (41,656)
                                            ------------   ------------   ------------   -----------
  Net cash provided by financing
    activities                                  184,714        (37,539)       196,842       (41,656)
                                            ------------   ------------   ------------   -----------

     NET INCREASE (DECREASE)                $     8,349    $   (35,687)   $    28,473    $  (65,872)
                                            ============   ============   ============   ===========
</TABLE>

See notes to condensed consolidated financial statements.


                                       5

<PAGE>

AIM GROUP, INC. AND SUBSIDIARIES


Notes to Condensed Consolidated Financial Statements
(Unaudited)

June 30, 1998


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-QSB 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 six months ended
June 30,  1998  are not  necessarily  indicative  of the  results  that may be
expected for the year ended December 31, 1998. 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 year ended December 31, 1997.


NOTE B - INVENTORIES

The components of inventory consist of the following:


<TABLE>
<CAPTION>
                                   June 30,         December 31,
                                     1998               1997
                                  ---------          ---------
<S>                               <C>                <C>
Finished Goods                    $  - 0 -           $  - 0 -
Raw material                         79,719            141,926
Klannerite Ore                       48,645             48,645
Spare parts and supplies              6,330             11,584
                                  ---------          ---------

                                  $ 134,694          $ 202,155
                                  ---------          ---------
</TABLE>


                                      6

<PAGE>

ITEM 2 -    MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

QUARTER ENDED JUNE 30, 1998 COMPARED TO QUARTER ENDED JUNE 30,1997

      Net sales of AIM Group,  Inc. (the  "Company") for the second quarter of
1998 amounted to $548,422, a decrease of $67,056 from net sales of $615,478 in
the prior year's  comparable  quarter.  The decline in net sales was primarily
attributable  to a  decline  in  demand  for  the  surface  treatment  of fire
retardant  materials.  Cost of products sold amounted to $417,763 and $486,939
in the second  quarters of 1998 and 1997,  respectively,  resulting in a gross
margin of 24% in the second  quarter of 1998 compared to a 21% gross margin in
the second  quarter of 1997.  The increase in the gross  margin was  primarily
attributable to lower product  material costs and an increase in higher margin
toll business.

      Selling  and  administrative  expenses  during the second  quarter  were
$147,247,  or 27% of net sales,  compared to $168,131, or 27% of net sales, in
the second  quarter of 1997.  Though these expenses were flat as a per cent of
sales,  there  were  approximately  $ 20,000  in  seasonal  and  non-recurring
expenses  in the  current  quarter  that  were not in the 1997  quarter.  Such
seasonal and  non-recurring  expenses included expenses relating to the Annual
Meeting of  Shareholders,  executive  officer  relocation  and a plant quality
improvement project.

      Interest  expenses  were  $51,184,  or 9% of net  sales,  in the  second
quarter of 1998 compared to $48,861, or 8% of net sales, in the second quarter
of 1997.  The  increase  in  interest  expenses  as a percent of net sales was
attributable to additional financing required during the current quarter.

      Primarily as a result of the above,  the Company  incurred a net loss of
$87,173, or $.022 per share, in the quarter ended June 30, 1998, compared to a
net loss of $107,853, or $.027 per share, in the quarter ended June 30, 1997.


                                      7

<PAGE>

      The net loss in the  quarter  ended June 30, 1998  compares  unfavorably
with the net profit of $34,390, or $.009 per share, in the quarter ended March
31, 1998.  The primary  reasons for the  performance  decline was a decline in
sales of $ 229,767 from $778,189 to $ 548,422 and incurrence of  approximately
$ 20,000 in seasonal and non-recurring items not incurred in the quarter ended
March 31, 1998.


SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997

      Net sales of the Company for the six months ended June 30, 1998 amounted
to  $1,326,611  an increase of $139,041  from the net sales of $ 1,187,570 for
the six months  ended June 30,  1997.  The majority of the increase was due to
strong sales  performance in the first quarter of 1998 attributable to a large
increase in demand for surface treatment of fire retardant materials. Sales in
the first quarter of 1998 were $778,189,  an increase of $ 206,097 compared to
sales of  $572,092  for the  first  quarter  of 1997.  Cost of  products  sold
amounted to $964,118  and  $915,477 for the six months ended June 30, 1998 and
1997,  respectively,  resulting  in a gross  margin  of 27% for the  first six
months of 1998 compared to 23% for the comparable period in 1997. The increase
in  gross  margin  is   primarily   attributable   to  greater   manufacturing
efficiencies  achieved at higher sales  levels and a decline in certain  major
material costs used in a main product line.

      Selling and  administrative  expenses  for the six months ended June 30,
1998 were $270,602,  or 20% of net sales,  compared to $395,107, or 33% of net
sales, in the six months ended June 30, 1997. The  significant  decline in the
1998  period  is  primarily  due to  major  cost  reductions  in the  areas of
personnel and rental space implemented in the last half of 1997.

      Interest  expenses were $105,873,  or 8% of net sales, in the six months
ended June 30, 1998 compared to $98,643, or 8% of net sales for the comparable
period in 1997. While interest  expense  remained  relatively flat the Company
did obtain  additional  financing during the six months ended June 30,1998 not
present in the same  period of 1997.  This cost was  offset by lower  interest


                                      8

<PAGE>

charges on existing debt such as factoring of receivables  resulting in little
change for this expense category.

      Primarily as a result of the above,  the Company  incurred a net loss of
$52,783,  or $.013 per share, in the six months ended June 30, 1998,  compared
to a net loss of  $260,458,  or $.066 per share,  in the six months ended June
30, 1997.


LIQUIDITY AND SOURCES OF CAPITAL

      The Company  incurred a negative cash flow from operations of $94,857 in
the second quarter of 1998,  compared to a positive cash flow from  operations
of $8,902 in the second quarter of 1997. As a percent of sales,  negative cash
flow was 17% in the current  quarter  compared to 1% for the second quarter of
1997. The negative cash flow for the current period was primarily attributable
to the net loss of 87,173 and larger  payments  to a primary  supplier.  As of
June 30, 1998, the Company had a working capital deficit of $608,163.

      In order to increase  available cash to meet expenses in the short term,
the Company  continued  its  factoring  arrangement,  which  provides for cash
advances  against  invoices  to  customers  during  the  period in which  such
invoices  are  outstanding.  Generally,  the  cost of  factoring,  similar  to
interest rates on short term borrowings, is payable on the amounts outstanding
and customer payments are then applied directly to advances.  Factoring, while
not increasing working capital,  does provide liquidity of receivables.  It is
the  intention of management  to  discontinue  the use of factoring as soon as
practicable.  During the  current  quarter  the  Company  obtained  additional
financing from Dr. Audrey L.  Braswell,  a Company  director,  for $150,000 as
well as an  inventory  line of  credit  from an  external  lender  which had a
balance  of  $83,442  at June 30,  1998.  The terms of the $ 150,000  loan are
interest only at the prime rate payable  monthly,  and the term of the loan is
for one year with the entire  principal  due on May 12,  1999.  The  inventory
credit line terms are an interest  rate of 2% monthly  with a credit line that
will fluctuate based on monthly  inventory  valuations.  These actions enabled


                                      9

<PAGE>

the Company to meet its current  expenses and pursue  research and development
work related to its mining operation in Arizona.

                               ----------------


PART II.    OTHER INFORMATION


Item 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

      The Company  conducted its Annual  Meeting of  Shareholders  on June 15,
1998.

      Paul R. Arena, James L. Austin,  Dr. Audrey L. Braswell,  Jr. and Ernest
W.  Purcell  were elected to serve as members of the Board of Directors of the
Company for one year or until their  successors  are  elected.  Mr.  Arena was
elected by a vote of 2,763,485 shares for, no shares against,  with 228 shares
abstaining.  Mr.  Austin was elected by a vote of 2,683,415  shares for,  none
against  and 2,527  shares  abstaining.  Mr.  Purcell was elected by a vote of
2,684,914  for,  none against and 2,299 shares  abstaining.  Dr.  Braswell was
elected by a vote of 2,760,980 shares for, none against and 2,527 abstaining.

      The proposed  ratification  of the selection of M. A. Cabrera & Company,
P. A., as the Company's  independent  accountants  for the current fiscal year
was approved by a vote of  3,081,252  shares for, no shares  against,  with 86
shares  abstaining.  However,  on June 24, 1998,  as reported in the Company's
Form  8-K  filed  on July  23,  1998,  that  firm  resigned  as the  Company's
certifying  accounting  firm. The Company is now in the process of selecting a
new certifying accountant.

      The proposed  amendment to the Company's  Certificate  of  Incorporation
providing for a one-for-three reverse stock split of the Company's outstanding
shares of Common Stock was approved by a vote of 2,668,644 shares for, 412,722
shares against,  with 142 shares abstaining.  The proposed reverse stock split
will become  effective  upon the close of business on the date of filing of an
Amendment to the  Company's  Certificate  of  Incorporation  with the Delaware
Secretary of State. As of the date of the filing of this Quarterly  Report and


                                      10

<PAGE>

Form  10-QSB,  the Company has not yet filed the  Amendment  with the Delaware
Secretary of State. The Company plans to file the Amendment during the quarter
ended September 30, 1998.


Item 5.     OTHER INFORMATION

      At the Company's  Annual Meeting of Shareholders  held on June 15, 1998,
shareholders  approved a proposed  amendment to the Company's  Certificate  of
Incorporation (the "Amendment") which will provide for a one-for-three reverse
stock  split (the  "reverse  split") of the issued and  outstanding  shares of
Common  Stock of the  Company.  The  Reverse  Split,  which was subject to the
approval of the Vancouver Stock Exchange,  will be effective upon the close of
business on the date of filing of the Amendment with the Delaware Secretary of
State and each  certificate  representing  shares of Common Stock  outstanding
immediately  prior to the  Reverse  Split (the "Old  Shares")  will be deemed,
without any action on the part of  shareholders,  automatically  to  represent
one-third  the number of shares of Common  Stock after the Reverse  Split (the
"New Shares").  The Company expects that the Reverse Split will be approved by
the Vancouver Stock Exchange and that the Company will file the Amendment with
the Delaware  Secretary of State during the quarter ended  September 30, 1998.
No fractional new shares will be issued as a result of the Reverse  Split.  In
lieu  thereof,  the number of shares  issuable to each  stockholder  whose Old
Shares are not  evenly  divisible  by three will be rounded up to the  nearest
whole share. After the Reverse Split becomes effective, stockholders of record
will be  requested to surrender  certificates  representing  the Old Shares in
accordance  with the  procedures to be set forth in a letter of transmittal to
be sent by the Company to stockholders.

      As discussed in the Company's  Proxy  Statement,  dated May 13, 1998 and
used in connection  with its Annual Meeting of  Stockholders  held on June 15,
1998,  the  Company was  planning  to conduct a public  offering of its Common
Stock in  connection  with the  proposed  acquisition  of another  corporation
during the late  summer or fall of 1998.  Although  the  Company is engaged in
discussions  regarding  a possible  acquisition  of another  corporation,  the
Company presently does not plan to pursue a public offering  transaction,  but


                                      11

<PAGE>

rather is exploring a possible  private  offering of its Common Stock designed
to raise capital to fund the possible acquisition and the Company's growth. No
assurance can be given that the Company will be able to  successfully  conduct
any such private offering.


Item 6.     EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS. The following exhibit is filed herewith:

         EXHIBIT NO.               DOCUMENT

            27                     Financial Data Schedule

(b)  REPORTS  ON FORM  8-K.  The  Company  filed a Form 8-K on July  23,  1998
     reporting the  resignation  on June 24, 1998 of the Company's  certifying
     accountant.


                                      12

<PAGE>

                                  SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) 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.

Aug 7, 1998                     By: /s/PAUL R. ARENA
                                    ----------------
                                    Paul R. Arena
                                    Chairman of the Board,
                                    Chief Executive Officer
                                     and President

Aug 7, 1998                     By: /s/LEIGH S. ZOLOTO
                                    -------------------
                                    Leigh S. Zoloto
                                    Chief Financial Officer,
                                     Secretary and Treasurer