Air Water in default after failing to pay 9% convertibles at maturity

By Devika Patel

Knoxville, Tenn., April 17 - Air Water International Corp. received notice from Montgomery Equity Partners, Ltd., a holder of the company's 9% secured convertible promissory notes, that it was in default on the notes, according to an 8-K filed Thursday with the Securities and Exchange Commission.

The filing said that the notes were issued in February 2006 and October 2006. The default interest rate is 15%.

The default notice claims that the company failed to pay the notes' principal at maturity and also failed to be listed on the OTC Bulletin Board or any other principal market.

Montgomery Equity Partners demands the full amount due on the notes, including interest and other amounts owed. The total outstanding principal is $1,445,784. Interest and other amounts are estimated at $200,000.

According to the default notice, the filing said, Montgomery Equity Partners has indicated a willingness to negotiate for an amicable resolution of these matters. However, there can be no assurances that the discussions will be successful.

Based in Miami Beach, Fla., Air Water International, formerly Universal Communication Systems, Inc., and its subsidiaries develop and market solar energy systems large-scale installations and portable consumer solar products, as well as systems for the extraction of drinkable water from the air.

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