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Microcap & Penny Stocks : American International Industries Inc. OTC BB Symbol EDII -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (822)	7/14/1998 2:56:00 PM
From: Janice Shell	Read Replies (1) \| Respond to of 4814

What a grisly story. Really, everyone should read all of it. edgar-online.com Here are some specific points that puzzle me: The aggregate market value of voting stock held by nonaffiliates of the registrant at April 30, 1998 was approximately $1,056,213 (at $.25). As of April 30, 1998, 4,777,079 shares of the registrant's Common Stock, $.0001 par value, were outstanding. And yet: On April 2, 1998, the Company announced that it has signed a Letter of Intent ("LOI"), to sell 25,000,000 new shares of Intile Common Stock for $2,000,000, in cash, to Energy Drilling Industries, Inc. ("EDII"). The purchase will represent approximately 82% of the then issued shares of common stock. The LOI is subject to certain conditions, including due diligence by both parties, amendment of the Company's charter to authorize additional shares of common stock, and preparation and execution of definitive agreements. The proceeds of the sale will be used in the restructuring of the bank debt on terms more favorable to the Company. One significant condition to the transaction is negotiating those terms with the Company's bank in advance of closing. EDII is a holding company headquartered in Houston, Texas with diverse interests in five industry segments: industrial, financial, oil and gas, real estate and entertainment. Management anticipates, depending upon the final terms of the definitive agreement, a potential gain of as much as $1,600,000 that will be offset by available tax net operating loss carryforwards. However, under regulation 382 the remaining unused net operating losses available for offset against taxable income will be significantly limited in future tax years. Whence these "new shares"? There are really quite a lot of 'em. Is this common? How much is authorized, and how much is now outstanding, or will be outstanding when the deal with EDII is closed? And this is always good news: The Company is a defendant in various lawsuits resulting from disputes arising in the day-to-day operations to which management believes the outcome based upon information currently available, in the aggregate, would not have a material adverse effect on the Company's financial position, results of operations or cash flows.