U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-KSB

     [X]  ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
EXCHANGE ACT OF 1934

     For the fiscal year ended February 28, 1997

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

     Commission File No.: 1-7948

                             AIC INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)
                      Delaware                      11-2192898
     State or other jurisdiction of                (I.R.S. Employer
     incorporation or organization)                Identification No.)


            117 East 57th Street, Room 21-H, New York, New York 10022
               (Address of principal executive offices) (Zip Code)

     Registrant's telephone number, including area code: (212) 838-3220

     Securities registered pursuant to Section 12(b) of the Exchange Act: None.

     Securities registered pursuant to Section 12(g) of the Exchange Act:

                     Common Stock, par value $.10 per share
                                (Title of Class)

     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  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [ ] No [x]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [x]

     The  aggregate  market  value  of  the  shares  of  Common  Stock  held  by
non-affiliates of the Company is unavailable.

     Indicate  the  number of  shares  outstanding  of each of the  registrant's
classes of common equity, as of the latest practicable date:


       Class of                                        Number of
      Common Equity                                      Shares
      Common Stock                                     4,207,379
     par value $.10




<PAGE>



                                     PART I

     Item 1. Business

     The Company

     AIC International,  Inc., and its subsidiaries (collectively the "Company")
are engaged in the importation, merchandising and wholesale distribution of high
quality  photographic  equipment.   Currently,   the  Company's  operations  are
conducted  exclusively  in  Germany,  through  Soligor  GmbH,  Foto Optik  Video
Elektronik (f/k/a A.I.C.  Fototechnik GmbH), a wholly-owned German subsidiary of
the Company's  wholly owned  subsidiary,  Allied Impex  Corporation,  a New York
corporation.  The Company does not  presently  conduct any  business  activities
other than Soligor GmbH.

     Historically,  the Company's  primary  business has been the sale of lenses
for 35mm  single  lens  reflex  (SLR)  camera,  which  has  declined  due to the
popularity of auto focus cameras and compact  cameras.  In fiscal 1996 and 1997,
the Company experienced  increasing demand of interchangeable lenses for its SLR
cameras.  In fiscal 1997,  the  Company's  sales of all types of Soligor  lenses
represented approximately 60% of the Company's total Soligor products sales.

     Since 1989, the Company's domestic activities were comprised of maintaining
a small  administrative  office with a minimal staff. The Company has no present
plans to expand its  business  activities  in the U.S.,  however,  Soligor  GmbH
continues to remain active in the photographic industry. U.S. operating expenses
are funded through dividends from Soligor GmbH.

     Products

     The Company,  through Soligor GmbH,  markets Soligor  photographic  lenses,
autofocus  (shutter)  cameras,  electronic  flash  equipment and  accessories in
Germany and other European  countries on an exclusive  distributorship  basis, a
common practice in the industry. Most of the Company's photographic equipment is
intended for sophisticated amateur users, as well as professional photographers.
Equipment  sold by the Company is  manufactured  exclusively  for the Company by
various manufacturers in Japan, Hong Kong, Taiwan, Korea, and China. All Soligor
lenses,  as well as the other  equipment,  are  warranted  by the  Company.  The
periods of such  warranties vary from one to five years depending on the type of
equipment.

     The Company has been  marketing  and  distributing  Soligor  brand  lenses,
exposure  meters and  accessories  since 1956.  Accessories  available under the
Soligor name include tripods,  electronic flash units,  camera bags,  binoculars
and  optical  devices.  Soligor  sales  represented  approximately  85%  of  the
Company's  overall  consolidated  sales for the  fiscal  year 1997 and 76.7% for
fiscal year 1996.  The Company owns the Soligor  trademark and has registered it
in many countries around the world.

     Since 1972, Soligor GmbH has been the exclusive  distributor in Germany for
Elmo products,  formerly a manufacturer of film cameras and projectors,  who now
produces  AV  equipment  and CCD  surveillance  cameras  in  Japan.  Elmo  sales
represented 14.9% and 22.4%, respectively, of the Company's overall consolidated
sales for the fiscal years ended 1997 and 1996.

     In 1986, the Company began purchasing flashes and winders for cameras to be
marketed by the Company and Soligor  GmbH under the name of Soligor from Maxwell
Electronics,  Ltd. ("Maxwell"),  a Hong Kong corporation all of whose shares are
owned by Daniel C.K.  Yu,  Chairman of the Board,  principal  shareholder  and a
Director of the Company.  Mr. Yu is also the sole  shareholder of AIC Investment
Ltd., a Hong Kong  corporation  which owns 77.6% of the Company's  Common Stock.
For  fiscal  years  1997  and  1996,  sales  of  Maxwell  products   represented
approximately 3.4% and 4.5%, respectively,  of consolidated net sales of Soligor
products.  In  connection  with these  sales,  from 1986 to March 1989,  Maxwell
extended  financing to the Company  and, as of February  28,  1997,  was owed an
aggregate of $1,341,101 by the Company,  including accrued interest of $667,827.
See Note 8 to Financial Statements.

     Distribution and Repair Operation

     The Company  distributes its merchandise by utilizing its warehouse located
in Leinfelden-Echterdingen near Stuttgart, Germany. Warranty repairs and service
operations  for the U.S.  are now being  performed on behalf of the Company by a
third party repairer.  Customers are billed for repairs made after expiration of
the applicable warranty period. The Company had liability for product warranties
for fiscal 1997 and 1996 of $96,124 and $93,674, respectively.

Competitive Conditions

     Despite the decline of photographic  consumers' spending power in Europe in
fiscal 1997,  the  Company's  total sales volume  increased by 18.9% in Deutsche
Mark  (representing  a 7.9% increase in the German  domestic  sales and 39.6% on
international  sales) compared to the prior year. The sales volume  increased by
8.8% in U.S.  dollars when combined  with effects of changes in exchange  rates.
This increase was primarily due to the Company's  German  subsidiary's,  Soligor
GmbH,  effective marketing program and successful  introduction of new products,
such as viewfinder cameras, AF zoom lenses and binoculars,  which have been well
received by European consumers.  The Company's competitors are not able to offer
lines as various and complete as Soligor.

     Sales of Soligor and Elmo products comprised 85.1% and 14.9%, respectively,
of the Company's  total sales for fiscal 1997.  62.1% of the  Company's  sale of
Soligor  product  were made in the German  domestic  market and 37.9% were sales
made internationally. Of the 37.9% of sales made internationally, 41.8% of total
exports  were to  countries of the  European  Common  Market,  48.6% to European
countries  which are not  members  of the Common  Market  and 9.6% to  countries
outside of Europe.

     Material Licenses

     The Company has an exclusive distribution agreement with Elmo Co. Ltd. (for
an unstated  period of time) for the  distribution  of Elmo AV equipment and CCD
surveillance cameras in Germany.

     Employees

     As of February  28,  1997,  the Company  employed  one person in the United
States and Soligor GmbH employed 36 persons in Germany.





<PAGE>



     Foreign Operations

     Soligor   equipment  is   manufactured   exclusively  for  the  Company  by
manufacturers in Japan, Hong Kong, Taiwan,  Korea and China (including  Maxwell)
usually under verbal  agreement,  terminable  at will.  Soligor GmbH imports and
sells Soligor  equipment in Germany as well as to importers and  distributors in
other countries. Sales from operations conducted by Soligor GmbH constituted all
of the Company's total consolidated sales during the last fiscal year.

     Item 2. Properties

     The Company  leases its  regional  offices in New York and  Germany.  These
leases cover an aggregate of approximately 14,000 square feet of floor space and
$122,000 in annual rentals.  The lease for the Company's  German offices expires
in the year 2000. On August 14, 1997, the Company's German  subsidiary,  Soligor
GmbH,  purchased  this building  located at  Schulze-Delitzsch  Str. 7, D-70711,
Leinfelder,  Echterdingen,  Germany for DM 1,560,000.  The  Company's  executive
offices  are  located at 117 East 57th  Street,  Suite 21H,  New York,  New York
10022,  in a  condominium  owned by the  Chairman  of the  Board  and  principal
shareholder  of the Company and are occupied on a month to month basis  pursuant
to which the Company pays building maintenance fees and property taxes.

     Item 3. Legal Proceedings

     The Company is  currently  having  discussions  with the New York State Tax
Department in connection  with fiscal years 1980,  1981 and 1982. The inquiry by
New York State arose in connection  with the Company's  payment of  deficiencies
assessed by the Internal  Revenue  Service in February  1995,  for the tax years
1980 through 1984.

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

     None.




<PAGE>



                                     PART II

     Item 5.  Market for  Registrant's  Common  Equity and  Related  Stockholder
Matters

     The Company's  Common Stock, par value $.10 per share (the "Common Stock"),
was traded on the  American  Stock  Exchange  (APH) until March 9, 1985 at which
time it was delisted. To the best of the Company's knowledge, there is no active
trading market in the Common Stock. Accordingly, the Company is unable to obtain
price information for the Common Stock.

     The number of  recordholders  of the Common Stock as of October 15, 1997 is
927.

     No cash or stock  dividends  were paid  during  fiscal  1996 and 1997.  The
future payment by the Company of dividends,  if any, is  discretionary  with the
Board  of  Directors  and  will  depend  upon the  Company's  earnings,  capital
requirements and financial  condition,  as well as other relevant  factors.  The
Company is not contractually restricted in its ability to pay dividends.
<TABLE>
     Item 6. Selected Financial Data

<CAPTION>
<S>          <C>    <C>    <C>    <C>    <C>    <C>

                                                                         Year Ended

                                       Feb. 28            Feb. 29               Feb. 28            Feb. 28            Feb. 28
                                        1997               1996                  1995               1994                1993

                                                  (Thousands of dollars, except per share amounts)

Income Statement Data
Net Sales                              $15,523            $14,274               $10,703            $9,916             $11,398
Net Income (Loss)                           67               (36)                 (592)             (125)                 (4)
Average Number of
 Outstanding Shares                      4,207              4,207                 4,207             4,207               4,207
Net Loss Per Share of Common Stock
                                           .02              (.01)                 (.14)             (.03)                 -
Cash Dividends                           None               None                  None              None                 None
Balance Sheet Data
------------------
Total Assets                             5,408              5,735                 6,377             6,312               5,722
Working Capital                          1,611              2,040                 2,121             2,181               2,426
Long Term Obligations                      107                127                   133               105                 113
Stockholders' Equity                     1,613              1,993                 2,073             2,147               2,407

</TABLE>





<PAGE>



     Item 7.  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operation

     Financial Condition of Discontinued Operations

     Maintaining the Company's  presence in New York,  which has been reduced to
minimal  operations,  is funded by dividends generated from the Company's German
subsidiary.  The Company  has no  intention  to operate  sales other than of the
German  subsidiary,  which has managed worldwide sales  successfully in the past
years.

     Results of Operations

     Despite the spending power of customers stagnating in Europe, the Company's
net sales  increased in fiscal 1997 by $1,249,324 to  $15,523,257  from sales of
$14,273,933 in fiscal 1996. In fiscal year 1997,  sales by the Company's  German
subsidiary,  Soligor GmbH,  increased by 8.75% from the prior year, by effective
promotion and adding more new products and accessories to existing lines.

     Cost of Sales

     As a percentage of sales, the Company's cost of sales increased to 69.1% in
fiscal 1997 from 66.5% in 1996.  The main reason for the increase was the higher
cost of imported  products due to  fluctuation of exchange rates of Japanese Yen
and German Deutsche Mark.

     Operating Expenses

     The Company's total selling,  general and administrative expenses decreased
to  $3,701,408  from  $3,765,245  the  previous  year,  as a result of increased
Soligor GmbH operating expenses offset by changes in exchange rate.

     In fiscal 1997,  operating  expenses of Soligor GmbH increased by DM711,900
(U.S. $421,940) compared to the prior year, due to an increase in sales.

     The Company  incurred  expenses of $112,000 in fiscal 1997 and  $111,000 in
fiscal 1996 in connection with maintaining a New York office.

     Taxes on Income

     After reconciling for the difference  between the reported tax expenses and
the amounts  computed by using the statutory  federal income tax rate, the total
income tax payable for fiscal year 1997 is $278,000.

     Summary

     In fiscal 1997, the higher sales volume resulted in a net income of $67,000
compared to a net loss of $36,000 for fiscal 1996.





<PAGE>



     Liquidity

     The Company's  working  capital at February 28, 1997 was $1,610,952 and was
$2,039,783  at  February  29,  1996.  The ratio of  current  assets  to  current
liabilities  was 1.44 to 1 at February 28,  1997,  and 1.54 to 1 at February 29,
1996.

     Net cash  provided  by  operating  activities  was  $736,508 in fiscal 1997
compared to net cash  provided  in  operating  activities  of $596,350 in fiscal
1996.

     Net cash of $59,997 for  capital  expenditures  in fiscal 1997  compared to
$3,494 which was received by sale of equipment in fiscal 1996.

     Net cash of  $247,313  was used in  financing  activities  in  fiscal  1997
compared to net cash of $653,035 in fiscal 1996.  The Company  believes its cash
flow, working capital,  internally generated funds and the funds available under
its line of credit is sufficient to meet its current working capital needs.

     Item 8. Financial Statements

     This information is contained on Pages F-1 through F-15 hereof.

     Item 9. Changes in and  Disagreements  with  Accountants  on Accounting and
Financial Disclosure

     None.




<PAGE>



                                    PART III

     Item 10. Directors and Executive Officers of the Registrant

     Each of the  following  individuals  was a  director  of the  Company as of
February 28, 1997.


                                
                                Position with the Company
                                Business Experience During
                                 the Past Five Years and
    Name              Age       Other Public Directorships    Director Since

Daniel C.K. Yu        61        Chairman and Director of the       1986
                                Company, Managing Director
                                of Maxwell Electronics, Ltd.

James B. Wong         65        Director and President of the      1987
                                Company

Stephen P.Y. Chow     69        Director of the Company,           1987
                                Director of Top-Q-A
                                Development Ltd., Top-Q-S
                                Investment Ltd., P.Y. Chow
                                (Secretaries) Ltd., P.Y. Chow
                                (Consultants) Ltd. and
                                Kiangsu and Chekiang
                                Residents (H.K.) Association

Robert I. Campbell    49        President of Stratheden            1988
                                Investment Ltd. of Monrovia,
                                Liberia, Solicitor & Notary
                                Public qualified in England &
                                Wales, Hong Kong and Australia


     The term of office of each  director  will  continue  until the next annual
meeting of stockholders or until his earlier death, resignation or removal.

     The  executive  officers of the Company as of February 28,  1997,  together
with their ages are:

Name                    Age                Office
James B. Wong           65                 President
Stephen Lai             43                 Secretary, Chief Financial Officer
                                           and Vice President


     Item 11. Executive Compensation

     The  following  table  sets forth the  compensation  paid or accrued by the
Company during the three fiscal years ended February 28, 1997, February 29, 1996
and February  28, 1995 to the  Company's  President.  For the fiscal years ended
February 28,  1997,  February  29,  1996,  and  February 28, 1995,  no executive
officer received cash compensation in excess of $100,000.

                           SUMMARY COMPENSATION TABLE

        Name and Principal Position           Year              Salary
        ---------------------------           ----              ------
James B. Wong..............................   1997              $36,000
 President.................................   1996              $36,000
                                              1995              $36,000


     The Company  also pays an annual  service fee of DM10,000 to members of the
Advisory Council of Soligor GmbH and a service fee of $3,000 to directors of the
Company.

     Item 12. Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth certain  information as of February 28, 1997
based on information  obtained from the persons named below, with respect to the
beneficial  ownership  of shares of Common Stock by (i) each person known to the
Company to  beneficially  own more than 5% of the  outstanding  shares of Common
Stock,  (ii) each executive  officer and director of the Company,  and (iii) all
officers and directors of the Company as a group.  Except as otherwise indicated
each  beneficial  owner has sole voting and  investment  power over such owner's
shares.

          Name                     Shares                      Percent of Class
AIC Investment Ltd., Hong Kong   3,267,361                          77.6%

Estate of Rose Silverman,
Forest Hills, New York             424,851                          10.1%

All Directors and Officers as
a group(five persons)                01                               01


     Compliance with Section 16(a) of the Exchange Act

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who own more than ten percent of a registered
class of the Company's equity securities (collectively, the "Reporting Persons")
to file reports of ownership and changes in ownership  with the  Securities  and
Exchange Commission and to furnish the Company with copies of these reports. New
rules governing these reports were adopted in February 1991 and generally became
effective  in May 1991.  Based solely on the  Company's  review of the copies of
such forms  received by it during the Company's  fiscal year ended  February 28,
1997,  the  Company  believes  that all filing  requirements  applicable  to the
Reporting Persons were complied with.

     Item 13. Certain Relationships and Related Transactions

     In 1986, the Company began purchasing flashes and winders for cameras to be
marketed by the Company and Soligor  GmbH under the name of Soligor from Maxwell
Electronics,  Ltd.  ("Maxwell").  Maxwell,  a Hong Kong corporation all of whose
shares are owned by Daniel C.K. Yu, Chairman of the Board, principal shareholder
and a  Director  of the  Company.  Mr.  Yu is also the sole  shareholder  of AIC
Investment  Ltd.,  a Hong Kong  corporation  which owns  77.6% of the  Company's
Common  Stock.  For  fiscal  years  1997 and  1996,  sales of  Maxwell  products
represented approximately 3.4% and 4.5%, respectively, of consolidated net sales
of Soligor  products.  In connection with these sales,  from 1986 to March 1989,
Maxwell extended financing to the Company and, as of February 28, 1997, was owed
an  aggregate  of  $1,341,101  by the  Company,  including  accrued  interest of
$667,827.

     Item 14. Exhibits and reports on Form 8-K

     (a) EXHIBITS

     3(i) Certificate of Incorporation of the Company, incorporated by reference
to Exhibit 3(a) to the Company's Registration Statement No. 2-29168.

     3(ii)  Certificate  of Amendment to  Certificate  of  Incorporation  of the
Company  incorporated  by reference to the Company's  Annual Report on Form 10-K
for the fiscal year ended February 28, 1988.

     3(iii) By-Laws of the Company, incorporated by reference to Exhibit 3(b) to
the Company's Registration Statement No. 2-29168.

     22 Subsidiaries of the Company.

     (b)(1) REPORTS ON FORM 8-K

     None.

     -------- 1 Does not include  3,267,361 shares owned by AIC Investment Ltd.,
Hong Kong which is  indirectly  controlled  by Daniel C.K.  Yu,  chairman of the
Board and a Director of the Company.





<PAGE>


                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                                    AIC INTERNATIONAL, INC.
                                                    Registrant



                                                 By:/s/---------------------
                                                    James B. Wong, President


     Dated: December __. 1997



     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  Registrant and in the capacities and on
the dates indicated.

     Signature                         Title                       Date

                                                                           
/s/----------------           President and Director          December __, 1997
James B. Wong

/s/----------------           Vice President, Secretary       December __, 1997
Stephen Lai                   and Chief Financial Officer
                                                               
/s/----------------           Director and Chairman           December __, 1997
Daniel C.K. Yu                of the Board

/s/----------------           Director                        December __, 1997
Stephen P.Y. Chow

/s/----------------           Director                        December __, 1997
Robert I. Campbell