Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : American Eco (ECGOF, ECX on Toronto exchange) -- Ignore unavailable to you. Want to Upgrade?

To: Frederick Langford who wrote (1768)	2/24/1998 5:45:00 PM
From: david james	Respond to of 2841

Well, if this is what goes through, it should be fine for Eco shareholders. Although its a rather unusual deal with the 5 to 1 conversion price into Eco shares of $15. So unless Eco is above $15, I'm not quite sure how DBCO shareholders will get their $3. In any case, I heard that one of the reasons for the delay in Eco earnings was that they had to wait for EIFH to file their 10q before the auditors could complete the Eco audit. Well, if the gossip going round is true, we should see some very nice upward movement from here. This could get interesting ... from the DBCO 10q freeedgar.com On February 20, 1998, the Company entered into a Securities Purchase Agreement (the "Agreement") with American Eco Corporation ("American Eco"), a corporation organized under the laws of Ontario, Canada. The Agreement provided for the sale of 1,923,077 Units at $2.60 per Unit for an aggregate purchase price of $5,000,000. Each Unit consists of one (1) share of common stock, $.001 par value per share, of the Company and one tenth (1/10) of a Common Stock Purchase Warrant. Each full Warrant entitles American Eco to purchase one (1) additional share of Company common stock at $3.00 per share during the next three (3) years. The Agreement also provided for the appointment of Michael E. McGinnis, the President and Chief Executive Officer of American Eco, to the Company's Board of Directors and Executive Committee. The sale was effectuated as a private placement transaction pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, provided by Section 4(2) thereunder. Legg Mason Wood Walker, Inc., the Company's financial advisor, is entitled to receive an advisory fee equal to 5 percent (5%) of the gross proceeds of this offering. The Company expects to utilize the proceeds from this placement for general working capital purposes. The Company entered into the Agreement with American Eco in connection with a letter of intent, also dated February 20, 1998 (the "Letter of Intent"). The Letter of Intent provides for (i) the placement described above; (ii) a $25,000,000 line of credit to be provided by American Eco to the Company (the "Line of Credit") not later than March 23 , 1998; (iii) concurrent with the provision of the Line of Credit, a management services agreement pursuant to which American Eco will provide executive management services to the Company; and (iv) American Eco's purchase of all of the issued and outstanding shares of common stock of the Company in exchange for convertible promissory notes of American Eco in the principal amount of $3.00 per share of the Company which are convertible into American Eco common stock at $15.00 per share. The Letter of Intent provides that the parties shall negotiate and execute definitive agreements regarding the acquisition transaction by no later than April 6, 1998. Except for the placement of the Units and the provisions of the Letter of Intent relating to confidentiality, non-solicitation of competing offers and fees which are payable to American Eco in the event the Company is acquired by someone other than American Eco, the Letter of Intent is non-binding. The transactions, other than the placement of the Units, are also subject to a number of conditions, including required regulatory and stockholder approvals. There can, therefore, be no assurance that the Company will be able to consummate the transactions with American Eco.