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

To: JimieA who wrote (1825)	3/1/1998 9:04:00 AM
From: Harry_Behemoth	Read Replies (1) \| Respond to of 2841

Thanks for the info. Very informative. Regarding Point 1, I think the tacit assumption was that DBCO could earn enough to offset the added 6.3 million shares, or around $10 million for $1.50/share. McConnell Dowell (60% owned by DBCO?) by itself should make over $20 million before taxes.

To: JimieA who wrote (1825)	3/1/1998 2:07:00 PM
From: Duncan	Respond to of 2841

Jim: Great post. NOL's are complicated animals...and the tax code changes all the time. When I have a little more time, I too will try and add a few thoughts on NOL usage when a change of control occurs. As for your comment <<3. Generally when there is a acquisition via the purchase method there is goodwill created. Especially since ECO is paying over two times shareholders equity for DB. Some of this excess will probably be added to goodwill. In this case when the combined company uses the acquired NOLs, the tax benefit would reduce goodwill and not reduce income tax expense. >> The 100% stock swap noted in the proposed DBCO acquisition, set at an exchange ratio of 5:1 will likely qualify for the "pooling of interests" acquistion accounting method..not the purchase method you note above. Pooling of interests requires many other issues to be met...which I won't address now. I'll wait to see how ECO's going to account for the transaction before I go off on an accounting diatribe...and put people to sleep. There is a caveat, however, and perhaps a very real one too. If ECO calls the convertible promissory notes or intends to call the notes at $3, this transaction will be accounted for under the "purchase" rules. Duncan