White Paper
It looks like we have a little over 200,000 shares against proposal 4 so far. I
liked a suggestion by Ron that everyone drop a copy in the mail to Mike, so
here's his address:
Michael E. McGinnis
c/o American Eco Corp.
11011 Jones Road
Cypress, TX 77070
Feel free to make any modifications you see fit, keeping in mind that a white
paper is a plan of action-statement of intent, as opposed to a complaint or
request for information. Also feel free to post the white paper or a link to any
other American Eco message boards. Anyone who would like to add their
shares to the total may email me at don.earl@connectexpress.com or post their
vote on the thread.
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AMERICAN ECO SHAREHOLDERS AGAINST PROPOSAL #4
I (name), a stockholder in American Eco, being strongly opposed to proposal
4, have voted (number) shares against the proposal to register up to 22 million
shares plus warrants for the purpose of a private placement of those shares and
warrants at a discount to market for the following reasons:
1. The impact of dilution on book value by the issuance of extra shares at
current levels is excessive and may deter potential future investors from taking
new positions, thus having a negative impact on the market value of my
holdings.
2. The impact of dilution on future earnings per share by the issuance of extra
shares is excessive and may deter potential future investors from taking new
positions, thus having a negative impact on the market value of my holdings.
3. At current levels, the issuance of additional shares would provide insufficient
leverage and revenue to justify the dilution to the stock of current shareholders.
4. A failed acquisition of the size suggested by the request for additional funding
would place American Eco in a precarious financial position from which
recovery may not be possible.
In lieu of a private placement of additional stock to fund acquisitions beyond
the company's current means, I would suggest the following, more prudent,
course of action:
1. Focus on internal growth of American Eco and it's profitable, and newly
acquired subsidiaries.
2. Improve marketing efforts to provide new sources of revenue.
3. Pursue cost cutting measures where appropriate to increase operating
margins and profitability.
4. Raise cash balances to produce interest income to offset interest expense
and where possible buy back long term debt.
5.American Eco is not a bank. Persons and entities who have insufficient
collateral and means to obtain financing from conventional lending institutions
should not be able to obtain financing through American Eco.
6. Cooperate more closely with the investment community through quarterly
conference calls, analyst coverage, improved public relations, and a wider use
of available media including the
Internet and the company's website.
7. Evaluate the benefits of making American Eco available to US fund
managers by dropping the foreign "F" designation from the ticker symbol.
8. After achieving the above goals, pursue a course of external expansion using
the leverage of a much higher market capitalization to acquire new subsidiaries
through the use of stock swaps and tax free mergers, while preserving cash to
further reduce debt levels and produce interest income. |
