Gang,
From the S-3/A filed yesterday some interesting reading for a sunday. I think that they are making sure that when the moon shot occurs that they can exercise the warrants immediately. Excerpts from the filing**********:)
Proposed Proposed
Title of Shares Amount to be Maximum Maximum Amount of
to be Registered Registered Offering Price Aggregate Registration
Per Share Offering Price Fee
Common Stock, par value $.08 per share 1,488,347 shares (1) $3.64(2) $ 5,426,483 $1,819(7)
Common Stock, par value $.08 per share 197,500 shares (1A) 6.25 $ 1,234,375 $ 407(7)
Common Stock, par value $.08 per share 5,500,000 shares (3) $4.00 $22,000,000 $6,667* **
Common Stock, par value $.08 per share 457,347 shares (3) $4.00 $ 1,829,388 $ 555**
Common Stock, par value $.08 per share 386,800 shares (4) $3.64(7) $ 1,407,952(7) $ 427(7)* **
Class A Warrants to Purchase Common
Stock, par value $.08 per share 193,400 wts. (4) - (5) - -
Common Stock, par value $.08, per share 193,400 shares (4) (6) $4.00 $ 773,600 $ 239* **
RECENT DEVELOPMENTS
OIL AND GAS EXPLORATION AND PRODUCTION
KAZAKSTAN AGREEMENT
On May 12, 1997, the Company, through its newly organized subsidiary, American International Petroleum Kazakstan ("AIPK"), entered into an agreement with MED Shipping and Trading S.A. ("MED"), a Liberian corporation with offices in Frankfurt, Germany, to buy from MED in exchange for a combination of cash and stock a 70% working interest in a Kazakstan Concession. The Concession is located about 125 miles from Chevron's multi-billion-barrel Tengiz Oil field near the Caspian Sea, and is bordered to the west by both Oryx/Exxon and Amoco licenses and to the south by an ELF Acquitane license. Preliminary, independent, evaluation indicates potential recoverable reserves from 7 structures in the Concession area from Jurassic Age sandstones. Nine additional structures have been identified but have not been evaluated.
The Company paid $100,000 in cash and 300,000 shares of its Common Stock to MED in return for the option to acquire a 40% working interest in the License. Further negotiations resulted in an increase in the working interest to 70%. As consideration for its 70% interest in MSUP, the Company issued an additional 2,950,000 shares of its Common Stock, and warrants to purchase an aggregate of 500,000 shares of its Common Stock at an exercise price of $2.00 per share.
The five-year minimum work program required by the License calls for the Company to acquire and process 3,000 kilometers of new seismic data, reprocess 500 kilometers of existing seismic data, drill 6,000 linear meters, and also requires an aggregate minimum expenditure of $14.7 million over the initial five-year exploration period. In addition, the Company assumed an obligation to pay the Kazakstan government three annual payments of $200,000 each beginning July 1998 for the purchase of existing seismic and geological data on the
License Area.
OUTSTANDING SENIOR DEBT. The Company's only senior debt outstanding as of November , 1997 consists of $10 million worth of one-year 14% convertible notes (the "Notes"), which were issued for net proceeds of approximately $9,579,000. The Company may prepay all, but not less than all of, the Notes six months after closing (the "Call Date") at the greater of (x) 100% of the principal amount of the Notes and (y) the number of shares into which the Notes are convertible on the Call Date plus accrued interest, minus one-third of the difference between
(x) and (y). Although the Holders of the Notes may convert the outstanding principal of the Notes at any time after November 27, 1997 into the Company's Common Stock at $6.25 per share approximately 112% of the average closing bid price for the five trading days preceding the closing), no conversions may take place before February 12, 1998 (120 days after close) unless the market price of the Company's Common Stock exceeds approximately $8.33 per share (145% of the Closing Price). After six months, the Notes may be converted at the lesser of (i) $6.25 per share, (ii) 85% of the Market price at conversion and (iii) the daily weighted-average sales price reported for the lowest five consecutive trading days during any 40-day period following the Call Date. The proceeds are being used for start-up capital for the refinery and for other Company projects and general correspondence. The Company anticipates that the Notes will be converted into common stock or repaid in full by the due date. If the Company is unable to repay the Notes on a timely basis, it believes it will be able to successfully renegotiate new payment terms with the holders of the Notes. However, failure to do so could impede or jeopardize the Company's ability to continue its operations. The previously outstanding notes to MGTF totaling $2,108,000 were paid in full on October 1, 1997. The Company utilized a portion of the proceeds from other borrowings to repay this debt
Gloria L. Bauman -0- 10,000 10,000 * *
Global Funding Group -0- 60,000 60,000 * *
Richard W. Cohen -0- 58,020 (3) 174,060 * *
Jessy Dirks -0- 38,680 (3) 116,040 * *
Walter P. Fitzgerald -0- 58,020 (3) 174,060 * *
Dan and Estelle Jacobson 280,000 10,000 10,000 * *
Michael J. Knight 20,000 10,000 10,000 * *
LKB Financial LLC -0- 457,500 457,500 * *
MG Trade Finance Corp. 130,000 168,912 168,912 * *
Millenium Holdings Group, Inc. 250,000 -0- 250,000 * *
Portfolio Investment Strategies Corp. -0- 30,000 30,000 * *
Robert A. Schneider -0- 38,680 (3) 116,040 * *
Gary Schulteis -0- 10,000 10,000 * *
Snow Becker Krauss P.C. 589,205 (5) -0- 150,000 1.1% *
Wall Street Consultants, Inc. -0- 161,547 161,547 * *
--- ------- ------- ---------- -----
TOTAL 1,269,205 1,111,359 1,898,159
===== ========= ========= =========
* Less than 1% of the outstanding Common Stock of the Company.
(1)Unless otherwise noted, the Company believes that all persons named inthe table have sole investment power with respect to all Shares beneficially owned by them. A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days from the date hereof upon the exercise of warrants.
(2) Issuable under the terms of outstanding options exercisable between $.41 and $6.25 per share of Common Stock.
(3) Issuable pursuant to underwriter's warrants issued in March 1994 covering, in the aggregate, 193,400 units each exercisable to purchase for 4.95 per unit, two shares of Common Stock and one Class A Warrant exercisable to purchase one share of Common Stock at $4.00 a share.
(4) Based on 54,328,714 shares of Common Stock outstanding (assuming full exercise of Class A Warrants and other warrants).
(5) Includes 439,205 shares of Common Stock owned by an investment partnership affiliated with Snow Becker Krauss P.C.
CLASS A WARRANT
Each Class A Warrant entitles the holder thereof to purchase one share of the Company's Common Stock through March 1, 1998 at an exercise price of $4.00. The Class A Warrants may be redeemed by the Company at any time prior to March 1, 1998 upon 15 days prior written notice, at a price of $.01 per Class A Warrant, provided that the average closing price of the Company's Common Stock shall have been at least $8.00 per share (200% of the exercise price of the Class A Warrants) for the 20 consecutive trading days prior to the notice of
redemption and the Company has a current prospectus to permit exercise of the Class A Warrants.
The Class A Warrants contain certain provisions that protect the holders thereof against dilution. The exercise price and the number of shares of Common Stock or other securities issuable upon exercise of the Class A Warrants are subject to, dividends (excluding cash dividends), splits, reclassifications,reapitalizations, reorganizations, mergers or consolidations of the Company.
The Class A Warrants may be exercised upon surrender of the Class A Warrant certificate on or prior to the expiration form on the reverse side of the Class A Warrant certificate completed and executed as indicated, accompanied by full payment of the exercise price (by check payable to the Company) for the number of Class A Warrants being exercised. The Warrantholders do not have the right or
privileges of holders of Common Stock.
The company needed to reregister to be able to rake in the money when they announce the PA and JV. Soon I hope!
DrRisk |
