AMERICAN INTERNATIONAL CONSOLIDATED INC, S-1/A, 1996-12-31

AMERICAN INTERNATIONAL CONSOLIDATED INC
S-1/A, 1996-12-31
GENERAL BLDG CONTRACTORS - NONRESIDENTIAL BLDGS

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As filed with the Securities And Exchange Commission on December 31, 1996

SEC Registration No. 333-9583

U.S. SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549

AMENDMENT NO. 2 TO

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

AMERICAN INTERNATIONAL CONSOLIDATED INC.
----------------------------------------------------
(Exact Name Of Registrant As Specified In Its Charter)

Delaware 1541; 1761; 1791 76-0145668
--------------------------- ------------------------- --------------
(State or Other Jurisdiction (Primary Standard (IRS Employer
Of Incorporation or Industrial Classification Identification
Organization) Code Number) Number)

14603 Chrisman
Houston, Texas 77039

(281) 449-9000

-----------------------------------------------------------------------
(Address, Including Zip Code, And Telephone Number, Including Area Code,
Of Registrant's Principal Executive Offices)

John T. Wilson, Chief Executive Officer
14603 Chrisman
Houston, Texas 77039

(281) 449-9000

-----------------------------------------------------------------------
(Address, Including Zip Code, And Telephone Number, Including Area Code,
Of Agent For Service
Copies to:
---------

Alan L. Talesnick, Esquire Felice F. Mischel, Esq.
Francis B. Barron, Esquire Thomas A. Rose, Esq.
Bearman Talesnick & Clowdus Schneck Weltman Hashmall & Mischel LLP
Professional Corporation 1285 Avenue of the Americas
1200 Seventeenth Street, Suite 2600 New York, NY 10019
Denver, Colorado 80202 (212) 956-1500
(303) 572-6500

Approximate Date Of Commencement Of Proposed Sale To The Public: As
Soon As Practicable After The Effective Date Of This Registration
Statement.

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [X]

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

====================================================================================================================================

Proposed Proposed Amount
Maximum Maximum Of
Offering Aggregate Registra-
Title Of Each Class Of Securities To Be Registered Amount To Be Price Per Offering tion
Registered Share(1) Price Fee
====================================================================================================================================

<S> <C> <C> <C> <C>
Shares of Common Stock, $.001 par value, offered .... 700,000 $ 5.00 $ 3,500,000 $ 1,060.60
by the Company

Common Stock Purchase Warrants offered by the ....... 700,000 $ .10 70,000 21.21
Company

Common Stock, issuable upon exercise of Common ...... 700,000 $ 5.00 3,500,000 1,060.60
Stock Purchase Warrants(2)

Underwriter's Warrants to purchase Common Stock ... 70,000 $ -- 9 .01

Underwriter's Warrants to purchase Warrants ....... 70,000 $ -- 1 .01

Common Stock, issuable upon exercise of Under- ...... 70,000 $ 8.25 577,500 175.00
writer's Warrants(3)

Warrants, issuable upon exercise of Underwriter's ... 70,000 $ .12 8,400 2.55
Warrants(3)

Common Stock, issuable upon exercise of Warrants .... 70,000 $ 5.00 350,000 106.06
underlying Underwriter's Warrants(4)

Common Stock, issuable upon exercise of
outstanding Common Stock Purchase Warrants .......... 3,000,000 $ 5.00 15,000,000 4,545.45

Common Stock to be sold by Selling Securities
Holders ............................................. 500,100 $ 5.00 2,500,500 757.72

Common Stock Purchase Warrants to be sold by
Selling Securities Holders .......................... 3,000,000 $ .10 300,000 90.91

Common Stock to be sold by Underwriter (from
Exercise of Underwriter's Warrants and
Warrants included in Underwriter's Warrants) ........ 140,000 $ 6.00 840,000 254.55
---------- --------
TOTAL ............................................... $26,646,410 $ 8,074.67(5)
====================================================================================================================================

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457.
(2) Issuable upon the exercise of Common Stock Purchase Warrants. This Registration Statement also covers any additional shares of
Common Stock which may become issuable by virtue of the anti-dilution provisions of the Common Stock Purchase Warrants. No
additional registration fee is included for these shares.
(3) Reserved for issuance upon exercise of the Underwriter's Warrants together with such indeterminate number of Common Stock
Purchase Warrants and/or Common Stock as may be issuable pursuant to the anti-dilution provisions of the Underwriter's
Warrants, or the Common Stock Purchase Warrants.
(4) Reserved for issuance upon exercise of Common Stock Purchase Warrants obtained upon exercise of the Underwriter's Warrants.
(5) Previously paid.

</TABLE>

-i-

<PAGE>

The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

-ii-

American International Consolidated Inc.

Cross-reference Sheet between Registration Statement (Form S-1) and Form of Prospectus.

Item Number And Caption Caption In Prospectus
- ----------------------- ---------------------
<S> <C>
10 General. Not Applicable.

101 Description Of Business. Business.

102 Description Of Property. Business--Properties.

103 Legal Proceedings. Business--Legal Proceedings.

201 Market Price Of And Dividends On The Description Of Securities; Principal
Registrant's Common Equity And Related Stockholders; Risk Factors.
Stockholder Matters.

202 Description Of Registrant's Securities. Description Of Securities.

301 Selected Financial Data. Selected Consolidated Financial Data.

302 Supplementary Financial Information. Not Applicable.

303 Management's Discussion And Analysis Of Management's Discussion And Analysis
Financial Condition And Results of Opera- Of Financial Condition And Results Of
tions. Operations.

304 Changes In And Disagreements With Accoun- Changes In And Disagreements With
tants On Accounting And Financial Accountants On Accounting And
Disclosure. Financial Disclosure.

401 Directors and Executive Officers. Management.

402 Executive Compensation. Executive Compensation.

403 Security Ownership Of Certain Beneficial Principal Stockholders.
Owners And Management.

404 Certain Relationships And Related Transac- Transactions Between The Company And
tions. Related Parties.

405 Compliance with Section 16(a) Of The Ex- Not Applicable.
change Act.

501 Forepart Of Registration Statement And Out- Registration Statement Cover Page;
side Front Cover Of Prospectus. Prospectus Cover Page; Prospectus Inside
Cover Page.

502 Inside Front And Outside Back Cover Pages Cover Page; Inside Cover Page; Back
Of Prospectus. Cover Page.

503 Summary Information, Risk Factors, And Prospectus Summary; Risk Factors.
Ratio Of Earnings to Fixed Changes.

504 Use Of Proceeds. Use Of Proceeds.

505 Determination Of Offering Price. Cover Page; Risk Factors.

506 Dilution. Dilution.

507 Selling Security Holders. Selling Securities Holders (in Alternate
Prospectus)

508 Plan Of Distribution. Cover Page; Underwriting.

-iii-

Item Number And Caption Caption In Prospectus
- ----------------------- ---------------------
<S> <C>
509 Interests Of Named Experts and Counsel. Experts; Legal Matters.

510 Disclosure Of Commission Position On Securities And Exchange Commission
Indemnification For Securities Act Liabilities. Position On Certain Indemnification.

511 Other Expenses Of Issuance And Distribution. Prospectus Inside Cover Page.

512 Undertakings. Not Applicable.

601 Exhibits. Not Applicable.

701 Recent Sales Of Unregistered Securities. Transactions Between The Company And
Related Parties.

702 Indemnification Of Directors And Officers. Not Applicable.

801 Securities Act Industry Guides. Not Applicable.

802 Exchange Act Industry Guides. Not Applicable.

</TABLE>

-iv-

<PAGE>

EXPLANATORY NOTE

This Registration Statement contains two forms of prospectus: one to be
used in connection with a primary offering of 700,000 shares of Common Stock and
700,000 Warrants (the "Offering Prospectus"), and one to be used in connection
with the secondary sale of 500,100 shares of Common Stock and 3,000,000 warrants
by certain Selling Securities Holders of Common Stock (the "Selling Securities
Holders' Prospectus"). The Offering Prospectus and the Selling Securities
Holders' Prospectus will be identical in all respects except for the alternate
pages for the Selling Securities Holders' Prospectus included herein which are
labeled "Alternate Page for Selling Securities Holders' Prospectus".

-v-

<PAGE>

[Red Ink]

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities And Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

<PAGE>

[Logo red, white and blue flag] Subject To Completion

December 31, 1996

[Red Ink]

PROSPECTUS

AMERICAN INTERNATIONAL CONSOLIDATED INC.

700,000 Shares Of Common Stock And 700,000
Redeemable Common Stock Purchase Warrants

This Prospectus relates to the offering (the "Offering") by American
International Consolidated Inc. (the "Company") of 700,000 shares of common
stock, $.001 par value (the "Common Stock"), and 700,000 Redeemable Common Stock
Purchase Warrants (the "Warrants") through I.A. Rabinowitz & Co. (the
"Underwriter"). The shares of Common Stock and the Warrants, which are offered
on a firm commitment basis, may be purchased separately and will be transferable
separately upon issuance.

Each Warrant entitles the registered holder thereof to purchase one share
of Common Stock at an exercise price of $5.00 per share, subject to adjustment
in certain events, at any time during the period commencing on the date hereof
and expiring on the fifth anniversary of the date hereof. The Warrants are
subject to redemption by the Company at $.01 per Warrant at any time commencing
12 months after the date hereof, on not less than 30 days' prior written notice
to the holders of the Warrants, provided that the average closing bid quotation
of the Common Stock, as reported on the OTC Bulletin Board or the average
closing sale price if listed on a national securities exchange, has been at
least 150% of the then current exercise price of the Warrants for each of the 20
consecutive business days ending on the third day prior to the date on which the
Company gives notice of redemption. The Warrants will be exercisable until the
close of business on the day immediately preceding the date fixed for
redemption. See "DESCRIPTION OF SECURITIES-Warrants".

Prior to this Offering, there has been no public market for the Common
Stock or the Warrants, and there can be no assurance that any such market for
the Common Stock or the Warrants will develop after the closing of this
Offering, or that, if developed, it will be sustained. The offering price of the
Common Stock and the Warrants and the initial exercise price and other terms of
the Warrants were established by negotiation between the Company and the
Underwriter and do not necessarily bear any direct relationship to the Company's
assets, earnings, book value per share or other generally accepted criteria of
value. See "UNDERWRITING". The Company intends to have the Common Stock and
Warrants quoted on the OTC Bulletin Board, an electronic quotation system
maintained by the National Association of Securities Dealers, Inc. ("NASD"),
under the trading symbols "AICI" and "AICIW," respectively. See "RISK
FACTORS--NO. 24--Possible Effects Of SEC Rules On Market For Common Stock And
Warrants".

In addition, 26 persons (the "Selling Securities Holders") who previously
purchased 500,100 shares of Common Stock and 3,000,000 warrants in a private
offering that was exempt from registration under federal and state securities
laws are proposing to sell those shares and warrants to the public. The Company
also is registering the exercise of those warrants by persons who purchase
warrants from the Selling Securities Holders and resales of the Common Stock
issuable upon the exercise of warrants by the Selling Securities Holders or
persons who purchase warrants from the Selling Securities Holders. These
transactions are being registered by separate Prospectus concurrently with this

-1-

<PAGE>

Offering. The Company will not receive any of the proceeds from the sale of
shares and warrants by the Selling Securities Holders.

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVESTMENT THEREIN INVOLVES A
HIGH DEGREE OF RISK. FOR A DESCRIPTION OF CERTAIN RISKS REGARDING AN INVESTMENT
IN THE COMPANY AND IMMEDIATE SUBSTANTIAL DILUTION, SEE "RISK FACTORS" (PAGE 9)
AND "DILUTION" (PAGE 19).

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY
STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>

==========================================================================================
Underwriting
Price To Public(1) Discount And Com- Proceeds To
missions(3)(4) Company(4)(5)
- ------------------------------------------------------------------------------------------

<S> <C> <C> <C>
Per Share (2) ........... $ 5.00 $ 0.50 $ 4.50

Per Warrant ............. $ .10 $ 0.01 $ .09

Total (2) ............... $ 3,570,000 $ 357,000 $ 3,213,000
==========================================================================================
</TABLE>

(See Notes on following page)

The Common Stock and Warrants are being offered by the Company through the
Underwriter on a firm commitment basis. The Offering is made by the Underwriter,
subject to the Underwriter's right to reject any subscription, in whole or in
part, or to withdraw or cancel the Offering without notice. It is expected that
delivery of the certificates representing the Common Stock and the Warrants will
be made against payment therefor at the offices of the Underwriter, 99 Wall
Street, New York, New York 10005 on or about _________, 1996.

I.A. Rabinowitz & Co.

The date of this Prospectus is December __, 1996

-2-

<PAGE>

Notes
-----

(1) The offering price has been arbitrarily determined by negotiations between
the Company and the Underwriter. See "RISK FACTORS".

(2) The Common Stock and Warrants are offered on a "firm underwriting" basis.
The Common Stock and Warrants are offered, subject to receipt and
acceptance by the Underwriter, to prior sale and to the Underwriter's right
to reject any order in whole or in part and to withdraw, cancel, or modify
the offer without notice. The Company has granted to the Underwriter an
option, solely to cover over-allotments of the Offering, to purchase all or
any part of 15 percent of the total number of shares of Common Stock and
Warrants for a period of 30 days from the date of closing of the Offering
at the price to public and subject to the underwriting discount and
commissions shown in the above table. See "UNDERWRITING". The Underwriter
reserves the right to reject subscriptions for any reason, including
without limitation, because the Underwriter determines that the subscriber
is not qualified to purchase the Common Stock or Warrants because either
(i) the Offering has not been qualified in the subscriber's jurisdiction,
or (ii) the Underwriter does not believe the investment is suitable for the
subscriber based on the investment profile and strategy of the subscriber.
In addition, the Underwriter may reject a subscription because the Offering
has been oversubscribed.

(3) The Underwriter will receive a non-accountable expense allowance equal to
three percent, or $107,100, of the $3,570,000 aggregate offering amount, of
which $25,000 already has been advanced by the Company.

Upon the closing of this Offering, the Company will enter into a consulting
and merger and acquisition agreement with the Underwriter pursuant to which
the Underwriter will receive a consulting fee of $108,000, payable at the
Closing, for services to be rendered by the Underwriter to the Company for
three years commencing on the closing date of the Offering.

The Underwriting Agreement also provides for reciprocal indemnification
between the Company and the Underwriter, including liabilities arising
under the Securities Act of 1933, as amended. See "SECURITIES AND EXCHANGE
COMMISSION POSITION ON CERTAIN INDEMNIFICATION".

(4) Upon the closing of the Offering, the Company will sell to the Underwriter
and/or its designees, for an aggregate price of $10, warrants to purchase
70,000 shares of Common Stock and 70,000 Warrants (the "Underwriter's
Warrants"). The Underwriter's Warrants will entitle the holder to purchase
the shares of Common Stock at a purchase price of $8.25 per share and the
Warrants at a purchase price of $.12 per Warrant. The Warrants are
exercisable at $5.00 per share during the four year period commencing one
year after the date of this Prospectus. See "UNDERWRITING".

(5) These amounts represent the proceeds to the Company after payment of the
underwriting commissions, but before deduction of other offering expenses
estimated at $495,000 (approximately $270,000 of which will have been paid
prior to closing). These other offering expenses include the
non-accountable expense allowance to the Underwriter of $107,100 and
additional offering expenses estimated at $387,900 for filing fees,
printing costs, legal and accounting fees, and miscellaneous expenses.
After allowing for all such expenses and prior payments, the net proceeds
to the Company from this Offering are expected to be $3,872,000.

-3-

<PAGE>

The Company intends to furnish its stockholders with annual reports
containing consolidated financial statements audited and reported upon by its
independent certified public accountants after the end of each fiscal year,
commencing with its fiscal year ending April 30, 1997. The Company may
distribute quarterly reports containing unaudited interim financial information.
The Company also will furnish stockholders with such other periodic reports as
the Company may determine to be appropriate or as may be required by law.

Officers, directors and affiliates of the Company, and persons associated
with them, may purchase Common Stock or Warrants in the Offering. If such
purchases are made, they will be made solely with a view toward investment and
not resale. It is not expected that purchases by officers, directors and their
affiliates will exceed five percent of the Common Stock or Warrants.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AND/OR WARRANTS
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE COMMON STOCK AND WARRANTS ARE OFFERED SUBJECT TO PRIOR SALE, ALLOTMENT,
WITHDRAWAL, CANCELLATION OR MODIFICATION OF THE OFFERING WITHOUT PRIOR NOTICE.
THE UNDERWRITER RESERVES THE RIGHT TO REJECT ANY SUBSCRIPTION IN WHOLE OR IN
PART. THE OFFERING CANNOT BE MODIFIED UNLESS AN AMENDED REGISTRATION STATEMENT
IS FILED AND DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE COMMISSION.

THE COMPANY HAS NOT PREVIOUSLY FILED ANY REPORTS WITH THE SECURITIES AND
EXCHANGE COMMISSION AND CURRENTLY IS NOT A REPORTING COMPANY.

ANY DOCUMENT WHICH IS INCORPORATED BY REFERENCE HEREIN BUT NOT DELIVERED
HEREWITH, MAY BE REQUESTED BY ANY PERSON TO WHOM THIS PROSPECTUS IS DELIVERED.
SUCH REQUESTS SHALL BE MADE TO AMERICAN INTERNATIONAL CONSOLIDATED INC., 14603
CHRISMAN, HOUSTON, TEXAS 77039, TELEPHONE NUMBER (281) 449-9000. DELIVERY OF THE
REQUESTED DOCUMENTS WILL BE MADE WITHOUT CHARGE.

-4-

<PAGE>

PROSPECTUS SUMMARY

The Company

The Company intends to take advantage of its increased capital and improved
financial condition resulting from this Offering by (i) increasing business
volume through increasing bonding capacity in order to access larger projects
and other new business, undertaking planned domestic and international marketing
programs, and increasing business referrals from suppliers and other business
contacts, and (ii) increasing operating margins and profitability through
decreasing interest expense (from reduction of debt) and decreasing bonding
costs. See "BUSINESS--Business Plan And Strategy" for a more detailed
description of this strategy and each of these items. See also "USE OF
PROCEEDS".

The Company's principal executive and administrative offices are located at
14603 Chrisman, Houston, Texas 77039, telephone number (281) 449-9000.

The Company was incorporated under the laws of Texas in May 1985 and
changed its state of incorporation to Delaware in June 1994. In July 1996, the
Company changed its name to American International Consolidated Inc. from
American International Construction Inc.

The Offering
<TABLE>
<CAPTION>

<S> <C>
Securities Offered The Company is offering 700,000 shares of the Company's common stock
(the "Common Stock") and 700,000 redeemable common stock purchase
warrants (the "Warrants"). Each Warrant entitles the holder to
purchase one share of Common Stock for $5.00 per share during the
period beginning on the date of this prospectus and ending five years
from the date of this prospectus. See "DESCRIPTION OF SECURITIES".

Offering Price $ 5.00 per share of Common Stock
$ .10 per Warrant

Warrant Exercise Price $ 5.00 per share of Common Stock, subject to adjustments in certain
circumstances

Warrant Exercise Period The Period commencing on the date of this prospectus and expiring on
__________, 2001.
Shares of Common
Stock outstanding prior to
Offering: 2,900,100

Shares of Common Stock offered (1): 700,000

Shares of Common Stock outstanding
after the Offering(1): 3,600,100

Warrants outstanding prior to
Offering(1): 3,000,000

Warrants offered(1): 700,000

Warrants outstanding after the Offering: 3,700,000

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<PAGE>

<CAPTION>
<S> <C>
Shares of Common Stock Outstanding
after the Offering assuming exercise of all
Warrants offered in Offering and previously
outstanding: 7,300,100

Estimated net proceeds to the
Company (2): $ 2,988,000

- --------------------
</TABLE>

(1) Does not include (i) up to 700,000 shares of Common Stock issuable upon
exercise of the Warrants included in the Offering, (ii) up to 105,000
shares of Common Stock included in the Underwriter's over-allotment option,
and (iii) up to 245,000 shares of Common Stock issuable upon exercise of
the Underwriter's Warrants and the warrants issuable to the Underwriter
upon the exercise of the Underwriter's Warrants and the exercise of the
warrants issuable pursuant to the Underwriter's over-allotment option. See
"UNDERWRITING".

(2) This amount is after deduction of aggregate selling commissions of $357,000
and of $225,000 as the unpaid portion of the other total estimated offering
expenses of $495,000.

<TABLE>
<CAPTION>
<S> <C>
Redemption Of The Warrants The Warrants are redeemable by the Company at a price of
$.01 per Warrant upon 30 days prior written or published
notice at any time commencing 12 months after the date of
this Prospectus and prior to their exercise or expiration,
provided however, that the closing bid quotation for the
Common Stock for each of the 20 consecutive business days
ending on the third day prior to the Company's giving
notice of redemption has been at least 150 percent of the
then effective exercise price of the Warrants. The Warrants
remain exercisable during the 30-day notice period. Any
Warrantholder who does not exercise that holder's Warrants
prior to their expiration or redemption, as the case may be,
forfeits that holder's right to purchase the shares of
Common Stock underlying the Warrants. See "DESCRIPTION OF
SECURITIES--Common Stock Purchase Warrants--Redemption".

Use Of Proceeds Net proceeds are intended to be used primarily for
undertaking additional marketing activities, payment of
outstanding indebtedness, and increasing working capital,
which is anticipated to enable the Company to increase its
bonding line. See "USE OF PROCEEDS" and "BUSINESS".

Risk Factors The securities offered hereby involve a high degree of risk
and substantial immediate dilution to new investors. See
"RISK FACTORS" and "DILUTION".

OTC Bulletin Board Symbols Common Stock - AICI Warrants - AICIW

</TABLE>

Summary Selected Financial Data

The financial statements included in this Prospectus set forth information
regarding the Company as of and for the fiscal years ended April 30, 1996, 1995
and 1994 (audited) and as of and for the six-month period ended October 31, 1996
(unaudited). See "FINANCIAL INFORMATION". The summary selected financial data
shown below is derived from, and is qualified in its entirety by, those
financial statements, which are contained in the "FINANCIAL INFORMATION" section
of this Prospectus.

-6-

Six Months
Fiscal Year Ended April 30, Ended October 31,
--------------------------- -----------------
1995 1996 1996
------------ ----------- -----------
(Unaudited)
<S> <C> <C> <C>
Operating
Results:

Revenues ........................... $ 24,317,051 $ 31,184,828 $ 18,088,507

Net Income ......................... 186,662 351,570 (1,665,329)
(Loss)(1)

Net Income Per
share .............................. .06 .12 (.57)

Balance Sheet April 30, October 31, 1996 October 31, 1996
Data: ------------------------------------ (Unaudited) (Unaudited)
1995 1996 Actual As Adjusted
------------ ------------ ---------------- ---------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Working Capital
(Deficit) ............................. $ (1,405,511) $ 836,774 $ (1,974,936) $ 1,013,064

Total assets .......................... 5,487,091 7,346,083 9,739,169 10,157,139

Long Term Debt ........................ 453,868 2,422,292 369,334 369,334

Total liabilities ..................... 6,059,154 7,566,576 10,374,741 8,074,741

Accumulated
(deficit) ............................. (720,218) (368,648) (2,033,977) (2,033,977)

Stockholders'
equity
(deficit) ........................... (572,063) (220,493) (635,572) 2,082,428

- ------------------------
</TABLE>

(1) Includes a pre-tax charge of $1,105,249 as the amortized portion of the
one-time non-recurring pre-tax charge to earnings of approximately
$1,250,000 for the 500,100 shares of the Company's Common Stock that were
issued in connection with the issuance of $300,000 of unsecured promissory
notes in July 1996. This one-time non-recurring charge will be amortized
over the term of the promissory notes. See Note 18 to "Notes To
Consolidated Financial Statements" and "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS".

(2) As adjusted to reflect the net proceeds from this Offering, including
repayment of $1.2 million of long-term debt and $300,000 of unsecured
notes. See "USE OF PROCEEDS".

-7-

<PAGE>
RISK FACTORS

THE COMMON STOCK AND WARRANTS BEING OFFERED INVOLVE A HIGH DEGREE OF RISK
AND, THEREFORE, SHOULD BE CONSIDERED EXTREMELY SPECULATIVE. THEY SHOULD NOT BE
PURCHASED BY PERSONS WHO CANNOT AFFORD THE POSSIBILITY OF THE LOSS OF THEIR
ENTIRE INVESTMENT. Prospective investors should consider carefully, among other
factors, the risk factors and other special considerations relating to the
Company and this offering set forth below.

Risk Factors Relating To The Business Of The Company

1. Possibility Of Unprofitable Operations. The Company's operating results
for each of the fiscal years ended April 30, 1996 and 1995 resulted in a profit;
however, the Company incurred operating losses for the six months ended October
31, 1996 and for each of the fiscal years ended April 30, 1994, 1993 and 1992,
and there is no assurance that the operations of the Company will be profitable
in the future. See "BUSINESS--Business Plan And Strategy" and "FINANCIAL
INFORMATION".

2. Limited Financial Resources, Negative Net Worth, And Outstanding
Obligations. The Company has limited financial resources available, which has
had an adverse impact on the Company's liquidity. Its activities and operations
to date have resulted in a negative net worth. There is no assurance that the
proceeds of this Offering will be sufficient to successfully develop, produce,
and market the Company's services. The Company may be forced to limit its
activities because of the lack of availability of adequate financing. In the
past, the Company's limited liquidity has limited the amount of credit available
from the Company's suppliers. If the Company were not to have adequate financing
available in the future, it is likely that this credit limitation would continue
and that the Company's domestic and international marketing would be directly
affected, which would impair the Company's ability to increase its business
volume.

The Company's negative net worth and financial condition in general have
prevented the Company from being able to obtain performance and payment bonds,
which has limited the Company's ability to obtain certain projects. If this
Offering is successfully completed, the Company believes that it will be able to
increase its bonding line and thereby increase the jobs available to it. See
"BUSINESS--Business Plan and Strategy--Strengthen Financial Condition and
Increase Bonding Capacity".

3. Outstanding Indebtedness. As of December 31, 1996, the Company owed its
major supplier of raw materials (the "Supplier") $1,300,000 for accounts payable
and an additional $2,135,000 that is evidenced by a note (the "Note") and other
related loan documents. The Company is required to make weekly payments of
$11,537 for outstanding principal and accrued interest on the Note until April
30, 2001. If this Offering is successfully completed, of which there is no
assurance, the Company intends to use $1.2 million of the proceeds to reduce the
balance of the Note to approximately $935,000, which will reduce the weekly
payments to approximately $5,100 per week. Pursuant to the terms of the Note, it
is an event of default if the Company's net income before interest expense is
less than 1.5 percent of the Company's total sales for any fiscal year beginning
with the fiscal year ending April 30, 1997. The Supplier has agreed to waive
this requirement for the first eight months (through December 31, 1996) of the
fiscal year ending April 30, 1997, but the Company will be required to satisfy
it for the last four months of the fiscal year ending April 30, 1997 and
subsequent fiscal years. Although the Company would not have satisfied this
requirement for any of its previous fiscal years, management believes that if
this Offering is completed, it will be able to satisfy the requirement for the
last four months of the fiscal year ending April 30, 1997 and for fiscal 1998
and thereafter while the Note is outstanding. Nevertheless, there is no
assurance that the Company will satisfy this requirement. As of December 31,
1996, the Company also was in violation of certain other covenants for which it
has received a waiver from the Supplier and for which there is no assurance that
the Company will be able to satisfy in the future. If all these requirements are
not satisfied as required in the future, the Company will be required to obtain
alternate financing, receive a waiver from the Supplier, or default on the Note.
See "BUSINESS--Indebtedness To Major Supplier".

-8-
<PAGE>

As of October 31, 1996, the Company also owed an aggregate of approximately
$349,000 to FCLT, L.P., a Texas limited partnership ("FCLT"), pursuant to two
loans that are payable in June 1998, are collateralized by the Company's land
and buildings, and are guaranteed by the three principal stockholders of the
Company. Aggregate monthly payments on these two loans are $6,082. See
"BUSINESS--Outstanding Bank Loans".

The Company had other obligations of an aggregate of approximately $173,000
at December 31, 1996 that require aggregate monthly payments of approximately
$13,200. The Company also is the obligor on an aggregate of $300,000 principal
amount of unsecured notes that will be repaid from the proceeds of this
Offering. See "USE OF PROCEEDS".

4. Fluctuations In Industry Construction Activity. Although most recently,
new construction projects for storage facilities, warehouses and pre-engineered
metal buildings and freezer/refrigerated facilities, as well as renovations and
remodeling projects, have occurred at a historically active rate, new projects
were not as numerous in prior years. These fluctuations in industry activity
result from numerous factors, including general economic conditions, interest
rates and the general real estate market. There can be no assurance that future
demand for the Company's services will be adequate for the Company to operate
profitably.

5. Uncertain Markets And Market Acceptance. No assurance can be given of
market acceptance or profitability from sales of the Company's current services
or that sales of future services will be profitable. The Company's industry is
extremely competitive and subject to numerous changes. See "BUSINESS".

6. Competition. The Company competes, in a highly competitive environment,
with many companies in the manufacture, construction and erection of storage
facilities, warehouses, pre-engineered metal buildings, freezer/refrigerated
facilities, and other construction services. Many of the Company's primary
competitors not only have greater resources than the Company, they also have
larger administrative staffs and more available service personnel. The larger
competitors also may use their greater financial resources to develop and market
their services. The presence of these competitors may be a significant
impediment to any attempts by the Company to develop its business. Major
competitive factors include product knowledge, experience, past relationships,
quality of performance, financial condition, reputation, timeliness, and
pricing. The Company believes that it ranks highly and therefore will have
certain competitive advantages in attempting to develop and market its services,
including the Company's excellent relationships with its past and current
customers, which has led to "repeat" business, the Company's product knowledge,
experience, past relationships, quality of performance, reputation and pricing,
and the Company's ability to respond to customer requests more quickly than some
larger competitors. For the year ended April 30, 1996, approximately 43 percent,
and for the six months ended October 31, 1996, approximately 27 percent, of the
Company's business was derived from repeat customers; however there is no
assurance that this will occur in the future. None of the Company's repeat
business is derived from long-term contracts, and all repeat business results
from separately negotiated contracts. With respect to lower rankings for
competitive factors, the Company's capitalization prior to this Offering has
placed it at a competitive disadvantage in the past but the Company believes
that as a result of this Offering it will increase its ability to compete on the
basis of financial condition. However, there is no assurance that this will
prove correct. See "BUSINESS--Marketing" and "BUSINESS--Industry Environment".

-9-

<PAGE>

7. Exposure To Construction Related Litigation. The construction industry
has a high incidence of litigation, and as a participant in this industry, the
Company is constantly exposed to the risk of litigation. Even though the Company
maintains insurance for these matters in amounts customary in the industry, and
even if the Company prevails in any such litigation, of which there is no
assurance, the management time and out-of-pocket expense expended in commercial
litigation could have an adverse impact on the Company.

8. Past Dependence On Major Customers. During the six months ended October
31, 1996 and the fiscal year ended April 30, 1996, U-Haul, Inc. accounted for
approximately $3.3 million and $8.1 million, respectively, or 18 percent and 26
percent, respectively, of the Company's total revenues. During the fiscal years
ended April 30, 1995 and 1994, U-Haul, Inc. accounted for approximately $4.8 and
$5.0 million, respectively, or approximately 20 percent and 19 percent,
respectively, of the Company's total revenues. The Company negotiates each
project with U-Haul separately as there is no contract with U-Haul covering the
construction of future projects. The loss of U-Haul, Inc.'s business could have
a materially adverse effect on the Company. Also during the fiscal year ended
April 30, 1994, another customer, with a contract for cold storage construction,
accounted for approximately 22 percent of the Company's total revenues. This
contract was entered into as a one-time project, and the Company does not
anticipate any future business from this customer. See "BUSINESS--Reliance On
Major Customers".

9. Previous Unprofitable International Operations. The Company plans to
expand its business in international markets but a significant portion of its
past experiences in international markets has been unprofitable. The past losses
from international business occurred in situations in which the Company had set
up satellite offices in other countries, such as Guam and Puerto Rico, and the
cost of operating and maintaining these offices was too great to operate
profitably. The Company has closed its offices in Puerto Rico and in Guam, and
believes that it will be able to conduct business internationally without
opening satellite offices. The Company currently is doing a small amount of
business internationally through an international sales force located in its
Houston, Texas headquarters.

10. Availability Of Labor. In order to minimize overhead, the Company often
contracts with independent third parties to provide a substantial portion of the
labor for its construction projects. Therefore, the Company's ability to provide
these services is dependent upon outside sources of workers and this may result
in delays in the completion of contracts due to the unavailability of such
labor. The Company is not currently experiencing, and has not in the past
experienced, a shortage of labor.

11. Possible Effect Of Subcontractors' Use Of Unionized Labor. At the
current time, the use of unionized labor by subcontractors engaged by the
Company does not have a significant effect on the Company because subcontractors
tend to use unionized labor only in areas where there is a heavy concentration
of unionized labor, and because in those areas other contractors in competition
with the Company most often utilize unionized labor so that there would be no
competitive advantages or disadvantages to the Company. There is no assurance
that this situation will remain constant in the future.

12. Dependence On Key Personnel. The success of the Company is largely
dependent upon the efforts of John Wilson, Chief Executive Officer and a
director of the Company, Danny Clemons, President and a director of the Company,
R. L. Farrar, Vice President of Operations, Treasurer, Secretary and a director
of the Company, and Jim Williams, Vice President of Finance, Assistant Secretary
and a director of the Company. The loss of the services of any of these persons
or the loss of the services of Jimmy M. Rogers, head of the Company's Thermal
System Division, could be detrimental to the Company as there is no assurance
that the Company could replace any of them adequately at an affordable

-10-

<PAGE>

compensation level. See "MANAGEMENT". The Company has entered into employment
agreements with each of the above officers. See "REMUNERATION--Employments
Contracts And Termination Of Employment And Change-In-Control Arrangements". The
Company is the beneficiary for $500,000 of key-man term life insurance coverage
on each of Messrs. Wilson, Clemons, Farrar, Rogers and Williams. There is no
assurance that these insurance policies will provide the Company with adequate
compensation in the event of the death of any of the insured.

13. Government Regulation And Workers Compensation Insurance. The Company
is subject to government regulation of its business operations. In addition, the
Company's construction activities must meet with the requirements of local
building codes, and the Company is required to provide workers compensation or
alternate insurance coverage for the Company's employees. Because of the nature
of the Company's business in construction services, the cost of this insurance
for the Company's on-site employees is higher relative to the cost of insurance
coverage for the Company's office personnel. When construction work is performed
on behalf of the Company by subcontractors, the subcontractors, and not the
Company, pay the direct costs of insurance for the construction workers. There
is no assurance that subsequent changes in laws or regulations will not affect
the Company's operations adversely.

14. Possible Need For Future Financing. The Company believes that the
proceeds of this offering will enable it to accomplish the purposes set forth
under "BUSINESS", although there can be no assurance that this will be the case.
If the proceeds of this offering are not sufficient, the Company would be
required to seek additional financing to enable it to conduct its business
operations. There can be no assurance that the Company will be able to obtain
such financing on acceptable terms. Any such additional financing may entail
substantial dilution of the equity of the then-existing stockholders of the
Company. The availability of additional financing may be restricted by
provisions in the underwriting agreement with the Underwriter that require, for
a period of 24 months after this Offering, that the Company obtain the
Underwriter's permission in order to issue securities for financing purposes.
See "UNDERWRITING".

15. Broad Discretion To Allocate Use Of Proceeds. The proceeds of this
offering have been allocated only generally. The specific uses of investors'
funds will depend upon the business judgment of management, upon which the
investors must rely, with only limited information about management's specific
intentions. See "USE OF PROCEEDS" and "BUSINESS".

16. No Proceeds To Company From Sales By Selling Securities Holders. The
Company will not receive any of the proceeds from the sale by the Selling
Securities Holders of the 500,100 shares of Common Stock and 3,000,000 Warrants
being registered pursuant to the registration statement of which this Prospectus
is a part. However, in the event that any of the 3,000,000 Warrants are
exercised, the Company will receive the proceeds from the exercise of those
warrants.

17. Benefits Of The Offering To Current Stockholders. Current stockholders
of the Company will benefit from the Offering, including the following: (i)
creation of a public trading market for the Common Stock, which is intended but
for which there is no assurance; (ii) the sale of up to an aggregate of 500,100
shares by certain non-management, non-employee stockholders at the time of the
public offering; and (iii) the substantial unrealized gain, based upon the
difference between the acquisition costs and the initial public offering price,
for stockholders who acquired their stock prior to the public offering. This
difference is $5.00 per share for the non-management, non-employee stockholders
who received an aggregate of 500,100 shares as partial consideration for loaning
the Company an aggregate of $300,000, and may be considered to be as much as
$4.99 for the shareholders who founded the Company in 1985 and during the
interim developed the business of the Company to its current level.

-11-

<PAGE>

18. Potential Conflicts Of Interest. Potential conflicts of interest may
arise between the Company and its officers and directors. Although each of the
Company's officers and directors is committed to devote full working time to the
business of the Company, they also may be engaged in other business activities.
As a result, conflicts of interest may arise in the area of corporate
opportunities or in the area of conflicting time commitments with respect to the
officers and directors of the Company. Conflicts of interest may also develop
with respect to contractual relationships that may be entered into between the
Company and any of its officers and directors. See "TRANSACTIONS BETWEEN THE
COMPANY AND RELATED PARTIES".

At the present time, there are not any material conflicts of interest
between the Company and any of its officers or directors, except to the extent
that their respective positions as large stockholders might present conflicts of
interest. A previously existing conflict of interest was resolved in May 1994
when AIC Management, Inc. merged with and into the Company. At the time of the
merger, AIC Management, Inc. owned the land and buildings that are utilized for
the Company's administrative offices as well as its metal buildings
manufacturing facility. The shareholders and directors of AIC Management, Inc.
at the time of the merger were Messrs. Clemons, Farrar and Wilson, who are the
three largest stockholders and three of the four directors of the Company.

The Company has established a policy pursuant to which the Board Of
Directors will consider transactions with officers, directors, and shareholders
of the Company and their respective affiliates. Pursuant to this policy, the
Board Of Directors will not approve any transaction unless it determines that
the terms of the transaction are no less favorable to the Company than those
available from unaffiliated parties. Because this policy is not contained in the
Company's Certificate Of Incorporation or Bylaws, the policy is subject to
change by the Board Of Directors, although it currently is not contemplated that
the policy will be changed. In addition, in the event any conflicts of interest
arise with respect to any officer or director of the Company, the Company
anticipates that its officers and directors will exercise their judgment
consistent with their fiduciary duties arising under the applicable state laws.
There can be no assurance that all conflicts of interest will be resolved in
favor of the Company.

19. Absence Of Outside Directors. At the present time, all the Company's
directors are officers and employees of the Company. Therefore, the Company
currently does not have any outside directors.

Risk Factors Concerning This Offering And The Securities Offered

20. Significant Dilution To Investors. An investor in this Offering will,
immediately after the Offering, incur significant dilution from the amount of
his initial investment, as compared to the book value per share of the Common
Stock purchased. Dilution to new investors will be $4.42, or 88 percent, per
share of Common Stock. It appears that significant dilution also will be the
case for any exercise of Warrants in the foreseeable future, although this
cannot be certain because the amount of any such dilution will depend on the
future business operations and other activities of the Company. See "DILUTION".

21. Control By Present Stockholders And Management. After the Offering,
each of Messrs. Clemons, Farrar, and Wilson, who are officers and directors of
the Company, will own 19.6 percent and Mr. Williams, who is an officer and
director of the Company, will own 3.8 percent of the Company's outstanding
Common Stock. Also after the Offering, Management of the Company as a group will
own approximately 62.7 percent of the outstanding shares of Common Stock and
will remain in effective control of the Company as it will own enough shares in

-12-

<PAGE>

the aggregate that it would be able to elect all of the directors of the
Company, and the investors in this Offering, voting by themselves as a group,
would not be able to elect any of the directors of the Company. See "PRINCIPAL
STOCKHOLDERS" and "DESCRIPTION OF SECURITIES".

22. No Dividends. Since its inception, the Company has paid no dividends
with respect to its Common Stock and it does not contemplate paying dividends in
the foreseeable future. The Company currently is prohibited from paying
dividends by its agreements with a supplier to whom it is indebted. See
"BUSINESS--Indebtedness To Major Supplier".

23. No Assurance Of Market For Common Stock Or Warrants. There currently is
no public market for the Common Stock or Warrants (collectively, the
"Securities") being offered, and no assurance can be given that a market will
develop. The Company has not taken any steps to create an aftermarket for the
Securities and has made no arrangements with broker-dealers to serve as market
makers in the Securities. If a trading market does develop for any of the
Securities, the prices may be highly volatile. The Underwriter is not obligated
to make a market in any of the Securities upon completion of this offering, and,
even if the Underwriter makes a market following the Offering, there is no
assurance that it will continue to do so in the future. In addition, if a market
for any of the Securities does develop, and the Securities are traded below
certain prices, many brokerage firms may not effect transactions in the
Securities, and sales of the Securities will be subject to Securities And
Exchange Commission ("SEC") Rule 15g-9. See below, "Risk Factor No. 24--Possible
Effects Of SEC Rules On Market For Common Stock And Warrants". Trading in the
Securities, if any, will be limited to the OTC Bulletin Board or the "pink
sheets" used by members of the NASD. If a market does not develop for the
Securities, it may be difficult or impossible for purchasers to resell the
Securities. The Company withdrew its application to list its securities on the
NASDAQ SmallCap Market ("NASDAQ") because NASDAQ indicated that the application
would not be approved. There is no assurance that any of the Securities can ever
be sold at the offered price or at any price.

24. Possible Effects Of SEC Rules On Market For Common Stock And Warrants.
If the Company's Securities are traded for less than $5 per security, then
unless the Company's net tangible assets exceed $2,000,000 or the Company has
had average revenue of at least $6,000,000 for the last three (3) years, the
respective security (a "Low-Priced Security") will be subject to SEC Rule 15g-9
concerning sales of low-priced securities or "penny stock" unless the security
is otherwise exempt from Rule 15g-9. Pursuant to Rule 15g-9, prior to concluding
a sale, a broker-dealer must make a special suitability determination for the
purchaser and receive the purchaser's written representations and agreement
concerning the transaction. In addition, Rule 15g-9 generally requires
broker-dealers to provide customers for whom they are effecting transactions in
a Low-Priced Security, before the transactions, with a standard risk disclosure
document describing the customer's right to disclosures of the (i) current bid
and ask quotations, if any, (ii) compensation of the broker-dealer and the
salesperson in the transaction, and (iii) monthly account statements showing the
market value of such stock held in the customer's account. If the Common Stock
or Warrants individually trade for more than $5 per security, then these rules
will not apply to transactions in the respective security trading for over $5.
To the extent that the respective security becomes a Low-Priced Security, these
rules will apply and would be expected to have a negative effect on the desire
of brokers to sell the Company's Securities, would be expected to have a
negative effect on the brokers' ability to do so, and also would be expected to
have a negative effect on the ability of purchasers in this Offering to sell the
Company's securities in the secondary market.

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<PAGE>

25. Underwriter's Influence On Possible Market For Common Stock And
Warrants. A significant amount of the Securities to be sold in this Offering may
be sold to customers of the Underwriter. These customers subsequently may engage
in transactions for the sale or purchase of such Securities through or with the
Underwriter. Although it has no legal obligation or commitment to do so, the
Underwriter may from time to time become a market maker and otherwise effect
transactions in such Securities. The Underwriter, if it participates in the
market, may be the sole or primary market maker, it may effect a large
proportion of all transactions in the Securities, and it may for these or other
reasons be a dominating influence in the market, if one develops, for the
Securities. The prices and liquidity of the Securities may be significantly
affected by the degree, if any, of the Underwriter's participation in such
market. In these situations, the price of the Securities as quoted by an
Underwriter may not be subject to an independent market for the Securities.

26. Shares Eligible For Future Sales. The Company has a total of 2,900,100
shares of Common Stock issued and outstanding that are "restricted securities".
Restricted securities may be sold in a registered public offering under the
Securities Act of 1933, as amended (the "1933 Act"), or in open-market
transactions in compliance with Rule 144 adopted under the 1933 Act if the
conditions of Rule 144 are satisfied. Generally, Rule 144 provides that, subject
to current information being publicly available concerning the Company, after a
person has held the restricted securities for a period of two years, that person
may sell, in any three-month period, an amount of up to one percent of the
Company's outstanding Common Stock. Persons who have not been affiliates of the
Company for at least three months and who have held their shares for more than
three years are not subject to any limitations on the sale of their restricted
securities. Under Rule 144, and subject to the sales volume limitations
described above, 2,400,000 shares of Common Stock would become eligible for
resale 90 days after the date of this Prospectus; however, the holders of
2,257,401 of these shares have agreed with the Underwriter not to sell any of
these shares until two years after the date of this Prospectus without first
obtaining the prior written consent of the Underwriter. In addition, the sale by
the Selling Securities Holders of 500,100 shares of restricted Common Stock,
3,000,000 Warrants, and the 3,000,000 shares of Common Stock underlying those
Warrants is being registered pursuant to the registration statement of which
this Prospectus is a part. Although the sale of the securities by the Selling
Securities Holders is being registered, the Selling Securities Holders have
agreed with the Underwriter that they will not sell any of these Securities
until _________, 1998 [one year after the effective date of this Registration
Statement] without first obtaining the prior written consent of the Underwriter.
Sales under Rule 144 and by the Selling Securities Holders, whenever they are
made, may have a depressive effect on the price of the Common Stock.

27. Possible Issuance Of Additional Shares Of Common Stock And Preferred
Stock. Subject to the Underwriter's right to approve any additional issuances of
Common Stock, preferred stock, and other securities of the Company for one year
after the effective date of the Offering, under the Company's Certificate Of
Incorporation, the Board Of Directors of the Company has the power to issue up
to an aggregate of 20,000,000 shares of Common Stock of the Company, of which
2,900,100 were issued and outstanding as of October 31, 1996, and of which an
additional 3,000,000 are reserved for issuance upon the exercise of previously
outstanding Warrants, without stockholder approval under certain circumstances.
If this were to occur, of which there is no present intention, there would be
additional equity dilution to the investors in this Offering. Under the
Company's Certificate Of Incorporation, the Board Of Directors of the Company
also has the power to issue all the 1,000,000 authorized and unissued shares of
the Company's $1.00 par value preferred stock without stockholder approval under
certain circumstances. The Board Of Directors of the Company has the right to
fix the rights, privileges and preferences of any class of preferred stock to be
issued in the future. Any class of preferred stock that may be authorized in the
future may have rights, privileges, and preferences senior to the Common Stock.
The creation of a class of preferred stock with rights senior to the Common
Stock could be authorized by the Board Of Directors of the Company without the
approval of the holders of the Common Stock and may adversely affect the rights
of the holders of Common Stock. See "DESCRIPTION OF SECURITIES" and
"UNDERWRITING".

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<PAGE>

28. Arbitrary Determination Of Offering Price Of Units And Exercise Price
Of Warrants. The price at which the Units are being offered to the public and
the price at which the Warrants are exercisable for shares of Common Stock have
been determined arbitrarily. The offering price and exercise price were arrived
at after negotiations between the Company and the Underwriter and were based
upon the Company's and the Underwriter's assessment of the history and prospects
of the Company, the background of the Company's management and current
conditions in the securities markets. Each of these factors was given
approximately equal weight. There is no relationship between the offering price
or the exercise price and the Company's assets, book value, net worth or any
other economic or recognized criteria of value. See "DESCRIPTION OF SECURITIES".

29. Registration Or Exemption Required To Exercise Warrants. Holders of
Warrants have the right to exercise their Warrants to purchase Common Stock only
if a registration statement relating to those shares is then in effect or an
exemption from registration is available and only if those shares are qualified
for sale, or are deemed to be exempt from qualification, under applicable
securities laws of the state of residence of the holder of those shares. The
Company intends to have a registration statement in effect at times that the
Warrants are eligible for exercise, although there can be no assurance that the
Company will be able to do so. However, the Company will not be required to
honor the exercise of the Warrants if, in its opinion, the issuance of Common
Stock would be unlawful because of the absence of an effective registration
statement or for other reasons. If the Company were unable to cause a required
registration statement to be effective during a period of time when holders
wished to exercise, the market value of the Warrants could be adversely
affected.

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<PAGE>
USE OF PROCEEDS

The net proceeds to the Company from this offering are estimated to be
$2,988,000 after deducting selling commissions and other unpaid expenses of the
offering. Total selling commissions equal to ten percent of the gross offering
proceeds from the Common Stock and Warrants, together with a three percent
non-accountable expense allowance, will be allowed to the Underwriter upon
consummation of the offering. Other expenses of the offering, estimated to be
$495,000, include the non-accountable expense allowance, printing costs, legal
fees, accounting fees, blue sky fees and costs, transfer agent fees, SEC and
NASD filing fees and other miscellaneous costs. Approximately $270,000 of the
total offering expenses will have been paid prior to closing by the Company,
leaving $225,000 of offering expenses and $357,000 of selling commissions to be
paid from the offering proceeds. The $2,988,000 of net proceeds are expected to
be allocated substantially as follows and applied in the following order of
priority, during the 12 month period following the offering(1):

<TABLE>
<CAPTION>
Approximate
Approximate Percentage
Amount of Net Proceeds
----------- ---------------
<S> <C> <C>
Domestic and International Marketing Program ..... $ 100,000 3.3%

Reduction of Secured Note to Major Supplier (2) .. 1,200,000 40.2%

Repayment of Unsecured Notes (3) ................. 300,000 10.0%

Upgrade Computer Software Systems ................ 50,000 1.7%

Reduction of Trade Accounts ...................... 800,000 26.8%

Other Working Capital (4) ........................ 538,000 18.0%
---------- -----
TOTAL NET PROCEEDS ...................... $2,988,000 100%
========== =====
</TABLE>

- --------------------

(1) See "BUSINESS--Business Plan And Strategy" for a description of how the
proposed allocation of proceeds of this Offering applies to the
Company's plans.

(2) The Company intends to reduce by $1.2 million the outstanding principal
balance on the outstanding note dated April 24, 1996, to its major
supplier. When this occurs, that note, which accrues interest at one
percent over the Prime Rate (as designated in The Wall Street Journal)
and matures on April 30, 2001, will be adjusted to decrease the weekly
payments from $11,537 to approximately $5,100. See
"BUSINESS--Indebtedness To Major Supplier".

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<PAGE>

financing of the Company or the closing of any transaction in which
the Company's securities are exchanged for securities of another
entity (whether by merger or otherwise).

(4) The Company's working capital will be utilized for general corporate
purposes and operating expenses, including payment of $108,000 for the
Underwriter's consulting fee. See "UNDERWRITING".

Although the amounts set forth above indicate management's present estimate
of the Company's use of the net proceeds from the Offering, the Company may
reallocate the proceeds or utilize the proceeds for other corporate purposes
based on the contingencies described below. The actual expenditures may vary
from the estimates in the table because of a number of factors, including
whether the Company has been operating profitably, what other obligations have
been incurred by the Company, whether the Company desires to expand its existing
operations, and other changes in circumstances. Although no alternate plans
currently exist, other uses could include additional funds for increased
marketing, expanded operations or additional payment on accounts. If the
Company's need for working capital increases, the Company could seek additional
funds through loans or other financing. No such arrangements exist or are
currently contemplated, and there can be no assurance that they may be obtained
in the future should the need arise. If the use of the proceeds of the Offering
in the manner described above proves impractical or it is otherwise deemed by
Management to be in the Company's best interests to utilize the proceeds in
another manner, the Company may apply the proceeds of the Offering in such
manner as it deems appropriate under the then existing circumstances. The
Company has no present intention, agreements or understandings to make any
material acquisitions of businesses, assets, or technologies.

DIVIDEND POLICY

The Company has not paid any cash dividends to date. As indicated under
"BUSINESS--Indebtedness To Major Supplier", the Company's Note to the Supplier
prohibits the payment of any dividends until the Note is paid in full. The
Company currently intends to retain its future earnings, if any, to fund the
development and growth of its business and, therefore, does not anticipate
paying cash dividends on its Common Stock in the future.

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<PAGE>
DILUTION

The net tangible book value of the Company as of October 31, 1996 was
$(1,026,432) or $(.35) per share, after giving effect to the 500,100 shares of
Common Stock issued in connection with the loan consummated in July 1996. Net
tangible book value per share represents the amount of total tangible assets of
the Company, reduced by the amount of its total liabilities, divided by the
total number of shares of Common Stock outstanding. After giving effect to the
sale by the Company of 700,000 shares of Common Stock and 700,000 Warrants at
the initial public offering price of $5.00 per share of Common Stock and $.10
per Warrant, the as adjusted net tangible book value of the Company as of
October 31, 1996 would have been $2,082,428, or $.58 per share of Common Stock.
This represents an immediate increase in net tangible book value of $.43 per
share to existing stockholders and an immediate dilution of $4.42 per share, or
88 percent, to new investors. The following table illustrates the per share
dilution in net tangible book value to new investors:

Public offering price per share .............................. $ 5.00

Net tangible book value per share before the Offering $ (.35)

Increase per share attributable to new investors .... $ .93

Net tangible book value per share after the Offering ......... $ .58

Dilution per share to new investors .......................... $ 4.42

The following table summarizes, on a pro forma basis, after the closing
of the Offering, the differences in total consideration paid for Common Stock
and the average price per share paid by existing stockholders and new investors
with respect to the number of shares of Common Stock purchased from the Company
assuming an initial public offering price of $5.00 per share:
<TABLE>
<CAPTION>

Shares Purchased Total Consideration
-------------------- ---------------------- Average
Number Percent Amount Percent Price/Share
--------- ------- ---------- ------- -----------
<S> <C> <C> <C> <C> <C>
Existing stockholders ...... 2,900,100 80.6% $ 148,155 4.1% $ 0.05

New investors .............. 700,000 19.4% $3,500,000 95.9% $ 5.00
--------- ----- --------- -----

Total ............. 3,600,100 100.0% $3,648,155 100.0%
========= ===== ========= =====
</TABLE>

The information presented above, with respect to existing stockholders,
assumes no exercise of the Underwriter's Warrants, the Warrants included in the
Offering, or the Warrants outstanding prior to the Offering. In addition,
200,000 shares of Common Stock have been reserved for issuance upon the exercise
of options granted pursuant to the Company's Stock Option Plan. No options
currently are outstanding. The issuance of Common Stock under such plan may
result in further dilution to new investors.

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<PAGE>
BUSINESS

Overview

American International Consolidated Inc. (the "Company") is a manufacturer
and general contractor that focuses primarily on three types of construction
products: the manufacture of metal buildings and structural steel projects; the
construction of mini-warehouses and self-storage facilities; and the
construction of cold storage, including refrigerated and freezer, buildings. The
Company's services range from the start, or design, phase to the finish, or
erection, phase of a project, including design, manufacture, general
construction, construction management, building, and turnkey services. The
Company selects, coordinates and manages subcontractors for substantially all
phases of the work, except for design, erection, and manufacture of certain
metal building components. The Company also provides oversight and supervision
of the entire construction process for each project.

The Company's principal executive and administrative offices are located at
14603 Chrisman, Houston, Texas 77039, telephone number (281) 449-9000.

Description Of Business

Within its manufacturing and construction operations, the Company operates
three specialty divisions: (i) the manufacture of metal buildings and structural
steel projects; (ii) mini-warehouses and other self-storage facilities; and
(iii) cold storage buildings, including refrigerated and freezer facilities. The
actual manufacturing, construction and other operating services related to these
are generally provided separately by the particular specialty division of the
Company, and the administrative or non- construction services are provided by
the same marketing, accounting, billing, collection, capital financing, in-house
legal, and other general administrative portions of the Company. Set forth below
is a description of each of the three specialty operations of the Company.

Manufacture Of Metal Buildings

The Company provides different variations of services in its metal
buildings and metal roof activities. Most often, the Company will be engaged to
pre-engineer, prepare construction drawings, manufacture the building frames,
procure all non-structural steel, sheeting and trim, and then ship these
products to the customer, with the customer being responsible for erection and
installation as well as site preparation for the building. The Company also may
be engaged, in some instances, in the actual erection of the building. In other
situations, the Company may be engaged only to provide the material components
or to provide the frame itself in the form of cut and welded pieces of steel
that are based on drawings provided by the customer. In all cases, the Company
generally will rely on the owner's being responsible for site preparation,
including work on the slab or other foundation.

The Company's metal buildings division also provides both conventional and
pre-engineered building face lifts and retrofits, and performs the dismantling
and relocation of metal buildings. The experience and knowledge to provide these
services are a natural by-product of the other services provided by the Company.

For the fiscal year ended April 30, 1996 and for the six months ended
October 31, 1996, the Company realized approximately $9.2 million and $8.8
million, respectively, in gross revenues from its metal buildings manufacturing
and construction services. Approximately $1.7 million, or 18 percent, of these
revenues for the 1996 fiscal year, and approximately $1.1 million of these

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<PAGE>

revenues, or 14 percent, for the six months ended October 31, 1996 resulted from
international sales despite the fact that the Company has virtually no
continuing marketing effort for international sales. For the fiscal years ended
April 30, 1995 and 1994, the Company's revenue from this division was $10.0
million and $9.6 million, respectively.

The Company believes that it could increase its international metal
buildings manufacturing and construction services significantly through a
marketing program that would entail attendance at trade shows and direct sales
visits to U.S. based companies with international operations. These two methods
of expansion appear preferable to attempting to establish more sales
representatives. The Company believes that international expansion is desirable
at this time because (i) there does not appear to be local competition in most
countries, (ii) international projects tend to have higher margins, and (iii)
with respect to Mexico in particular, the North American Free Trade Agreement
("NAFTA") significantly reduces taxes and makes transportation of products and
materials both easier and less expensive. The Company believes it may be at a
competitive advantage for international business because its metal buildings are
generally more simple to erect, the Company is better able to provide continued
service after the completion of the transaction, and the Company tends to be
able to customize its proposals to deal with international needs that may be
different from those for domestic projects. Because the Company's metal frames
generally include more of the component pieces already welded on than those of
its competitors, they are simple to erect.

The Company also is attempting to increase the volume and profitability of
its metal buildings manufacturing and construction services by pursuing
specialty buildings, such as wood processing plants, shopping centers, medical
centers, professional buildings and office buildings, and undertaking projects
in areas where local competition does not exist. The Company has built four wood
processing plants in the past, was awarded a contract for another wood
processing plant in July 1996 which is presently under construciton, and
submitted bids for two additional wood processing plants in early August 1996.
The Company has received a non-binding oral indication that it will be awarded
the contract for one of these projects with construction scheduled to start in
March. A formal contract and certain specific terms are pending. These plants,
which make various types of particle board, pressboard and strand board out of
wood, tend to be located in thinly populated or wilderness areas where there are
no local construction companies able to undertake the required project. This
should provide the Company with a competitive advantage because it is accustomed
to constructing its projects in localities other than its headquarters and to
bringing its workers and subcontractors into areas away from home.

In constructing metal buildings, the Company utilizes steel frames and
steel roof materials, however the walls can be made of brick or any other
material. The Company believes it is at a competitive advantage in bidding
projects utilizing non-steel materials for the walls because most of its
competitors prefer to use metal walls that they manufacture and thereby increase
their profit, whereas the Company purchases all walls from other companies,
regardless of whether they are metal, and therefore, there is no incentive for
the Company's bids for projects with non-steel walls to be structured to favor
the steel wall alternative.

There are approximately 38 full time employees working in the metal
buildings divisions, including one salesperson, one estimator, one customer
service representative, one shop manager, four draftspersons, two secretaries,
two international sales persons, four installation laborers, and 22 shop
personnel including machine operators, welders, foremen and helpers.

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<PAGE>

Construction Of Mini-Warehouses

During the fiscal year ended April 30, 1996 and the six months ended
October 31, 1996, the Company realized revenue of approximately $20.6 million
and $8.8 million, respectively, from its mini- warehouse construction. For the
fiscal years ended April 30, 1995 and 1994, the Company's revenue from this
division was $11.5 million and $10.3 million, respectively. Generally,
mini-warehouse projects are undertaken in one of the following three ways: (1)
the Company is engaged to provide all aspects of the project from breaking
ground to turnkey installation; (2) the Company is engaged as a subcontractor to
provide the building frame, the walls, roof and interior partitions; and (3) the
Company is engaged to convert existing buildings, such as office buildings,
strip centers, warehouses and manufacturing buildings, into mini-warehouse
facilities. In all three of the above situations, the Company provides its own
trained job foreman and crew to erect the steel portion (walls, roof,
partitions) and subcontracts the remaining work to regional contractors.

Approximately 26 percent of the Company's mini-warehouse construction work
currently is being undertaken on behalf of U-Haul Inc. For the fiscal year ended
April 30, 1996 and April 30, 1995, U- Haul Inc. represented approximately 47
percent and 41 percent, respectively, of the Company's mini- warehouse
construction business although the Company has also transacted construction work
for Public Storage, Inc., Shurguard Corporation, and other companies. The
Company believes that it is the contractor for approximately 25 to 35 percent of
U-Haul Inc.'s mini-warehouse construction business and that the Company 's
relationship with U-Haul Inc. continues to be excellent.

The Company's employees for its mini-warehouse construction business
include a chief operating officer, a construction manager, one architectural
draftsperson, three project managers, an operations coordinator, a project
assistant, an executive secretary, two purchasing department employees, three
estimators, four draftspersons, four salespeople, nine field superintendents,
and 40 to 50 crew members.

Construction Of Cold Storage (Refrigerated And Freezer) Buildings

The Company's cold storage construction services are performed with the
Company serving either as a specialty subcontractor that is responsible only for
constructing the refrigerated or freezer portions of the building, or as a
general contractor that is responsible for the entire building. When the Company
acts in the capacity of a general contractor, it subcontracts out most aspects
of the construction that do not deal directly with the cold storage function.

For the fiscal year ended April 30, 1996 and the six months ended
October 31, 1996, revenue from cold storage construction services accounted for
approximately $1.4 million and $.5 million, respectively. For the fiscal years
ended April 30, 1995 and 1994, the Company's revenue from this division was $2.8
million and $7.9 million, respectively.

Much of the business and many of the referrals in the cold storage line of
business are influenced heavily by a contractor's financial condition, bonding
capacity, and rapidity of payment. The Company believes that as a result of this
Offering, it will improve its financial condition, increase the frequency of
payment of its accounts, and obtain more desirable terms for its bonding
arrangements and material purchases. These factors are particularly important in
obtaining cold storage construction business because a very high percentage of
the referrals for cold storage construction come from suppliers, and the
suppliers tend to favor those construction companies that pay their bills on a
timely basis. In addition, a high percentage of the work available in cold
storage construction is for companies with national or international operations.
Financial strength and bonding ability are considered quite important by
companies of that nature.

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<PAGE>

Competition in cold storage construction is highly specialized and limited.
The Company believes that if it is able to improve the timing of its payments
and its credit standing, it will lower its costs by obtaining better terms from
suppliers and increase its business by the improved supplier relationships and
image of the Company. It also believes that its business will improve to the
extent that any of the Offering proceeds are spent on additional marketing
activities.

Personnel involved in the Company's cold storage construction services
include a chief operating officer, a vice president-in-charge of field work and
purchasing, a general superintendent, a site supervisor, an administrative
secretary and two salespersons.

Backlog

As of October 31, 1996 the Company had an aggregate backlog of
approximately $17.6 million, including a backlog of $6.6 million related to its
metal building manufacturing division, $9.7 million related to its
mini-warehouse construction division, and approximately $1.3 million related to
its cold storage construction division. The Company expects to complete all of
this backlog by April 30, 1997. By comparison, as of October 31, 1995, the
Company had an aggregate backlog of approximately $14.7 million in the
respective amounts of $2.5 million, $12.0 million, and $.2 million related to
its metal building manufacturing, mini-warehouse construction, and cold storage
construction divisions, respectively.

Industry Environment

Management believes that the current industry environment complements the
Company's plan to focus on its three types of specialty manufacturing and
construction services. The demand for mini- warehouses and pre-engineered metal
buildings has increased dramatically in the past few years. The Company believes
that the demand for these structures will continue to increase, and that it is
well positioned to meet this demand because of its expertise and business
reputation in these areas. Management also believes that the general increase in
the level of business internationally, coupled with the Company's ability to
service those areas and the relatively low level of competition for the Company
in many of those areas, also positions the Company extremely well for growth,
most particularly with respect to cold storage and metal buildings. See "RISK
FACTORS--Previous Experience In International Markets". Although there is no
assurance that the growth of the industry or of the Company will continue, the
Company believes its business will continue to increase and that it will benefit
from a future increase in new construction in these and other areas.

Business Plan And Strategy

Management of the Company believes that the Company's significant business
experience, quality of services, client relationships and efficient operations
are attributes that will enable the Company to continue to progress in the
current industry environment.

Management's business plan and strategy in following through from this
Offering is summarized as follows:

Increase Business Volume

Strengthen Financial Condition And Increase Bonding Capacity. By
strengthening its financial condition, the Company recently has increased, and
anticipates it will be able to further increase, its bonding capacity. Based on

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<PAGE>

its financial results for the fiscal year ended April 30, 1996, the Company has
increased its bonding capacity for a single job from $250,000 to $500,000 and
its aggregate bonding capacity from approximately $1.5 million to $2.5 million.
It is anticipated, based on discussions with the Company's bonding agent, that
as a result of this Offering the Company's bonding capacity would increase to $5
million per job and that its aggregate bonding capacity also would increase
significantly; however, there is no assurance that this will occur. Each
increase in the Company's bonding capacity expands the number, nature and size
of contracts that are available for the Company to submit bids.

Undertake Planned Domestic And International Marketing Programs. The
Company intends to utilize a portion of the proceeds of this Offering to
undertake planned domestic and international marketing programs through
attendance at industry trade shows, direct sales visits, and advertisements in
publications. See "USE OF PROCEEDS". In the past, the Company has not budgeted
or expended a significant or otherwise meaningful amount of funds for marketing.
Management of the Company believes that because of the Company's experience,
reputation and expertise, a planned marketing effort should be successful in
deriving new business; however, there is no assurance that this will be the
case. Management of the Company believes that despite past losses in
international markets, it will be able to operate profitably in international
markets in the future. This is based on the Company's belief that because it is
accustomed to undertaking projects in areas geographically separated from its
home office, it will be better suited to serving customers in foreign markets
than competitors that generally operate in proximity to their home base. The
Company also believes that it will be able to operate profitably in foreign
markets because it believes the demand in those markets currently exceeds the
availability of qualified companies to service them. See "RISK FACTORS--No.
9--Previous Unprofitable International Operations".

Increase Business Referrals From Suppliers And Other Business Contacts.
Management of the Company believes that this Offering will enable the Company to
have sufficient working capital to be more timely in payment of its trade
accounts and that this, together with other aspects of its improved financial
condition, will result in an increase in business referrals received by the
Company from its suppliers and other business contacts. Nevertheless, there is
no assurance that this will occur.

Increase Margins And Profitability

Decrease Cost Of Metal Building Panels, Roofing, and Trim Components. As a
result of the successful completion of this Offering and reduction of the Note
to the Supplier, the Company believes it will be able to obtain purchase
discounts on metal building components, which will enable it to increase margins
and profitability; however there is no assurance that these purchase discounts
will be available.

Decrease Interest Expense. The Company will utilize $1.2 million of the
proceeds of this Offering to reduce outstanding indebtedness to the Supplier.
This indebtedness currently accrues interest at one percentage point above the
prime rate. See "USE OF PROCEEDS" and "--Indebtedness To Major Supplier". As a
result of this debt reduction, the Company's weekly payment on this debt, which
is currently $11,537 will decrease to approximately $5,100.

Decrease Bonding Costs. During its fiscal year ended April 30, 1996, the
Company paid aggregate premium expenses of approximately $35,000, or
approximately four percent of the respective gross contract price to obtain
performance bonds for its work. Management believes, based on discussions with
its bonding agent, that the improvement in the Company's financial condition
resulting from the Offering will enable the Company to obtain performance bonds
for a premium cost of 1.5 to 2.0 percent of the respective gross contract

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<PAGE>

prices; however there is no assurance that this will occur. Although the total
amount that would have been saved in bonding costs during fiscal 1996 is
limited, future savings are anticipated to be more significant because the
Company believes that in the future it will be utilizing greater amounts of
performance bonds because of the increased bonding capacity it believes will be
available. See "--Increase Business Volume: Strengthen Financial Condition And
Increase Bonding Capacity" above.

Marketing

The Company obtains business primarily through repeat business from
previous and existing customers and recommendations from customers and vendors.
As indicated elsewhere in this Prospectus, the Company intends to utilize a
portion of the proceeds of this offering to undertake a marketing program that
includes trade show attendance, sales call visits, and advertising. Management
believes that a marketing program of this nature will have a positive impact on
the Company's business. See "USE OF PROCEEDS" and foregoing subsections under
"Description Of Business".

Reliance On Major Customers

During the six months ended October 31, 1996 and the fiscal year ended
April 30, 1996, one of the Company's customers, U-Haul, Inc., accounted for
approximately $3.3 million and $8.1 million, respectively, or approximately 18
percent and 26 percent, respectively, of the Company's total revenues. For the
fiscal year ended April 30, 1995, U-Haul, Inc. represented $4.8 million, or 20
percent, of the Company's total revenues. Although the loss of U-Haul Inc.'s
business could have a material adverse effect on the Company, the Company
believes that this is unlikely to occur in the near future and that the
potential effect on the Company will decrease over time as the Company's
revenues from other customers increase.

Subsidiaries

C.H.O.A. Construction Company ("C.H.O.A.") was formed in September 1993 to
perform general construction services in the State of Louisiana. C.H.O.A. was
formed as a Louisiana corporation and originally was owned 80 percent by the
Company and 20 percent by a general contractor licensed in Louisiana.
Subsequently, the Company acquired the 20 percent minority interest, and
C.H.O.A. currently is a wholly-owned subsidiary of the Company. C.H.O.A. was
dissolved on September 13, 1996.

L. Campbell Construction, Inc. ("Campbell") was formed as a wholly-owned
subsidiary of the Company in order to handle the Company's turnkey and general
construction operations. Campbell was incorporated under the laws of the State
of Texas in January 1991. Since its inception in January 1991, much of the
general construction work has been performed by the Company directly under
agreement with U-Haul. Consequently, the Company has little or no future need to
perform general construction operations under Campbell and expects to dissolve
Campbell or merge Campbell with and into the Company. Campbell currently has no
assets and no liabilities.

In November 1994, two wholly-owned subsidiaries of the Company, American
International Thermal Systems, Inc. ("AI Thermal") and American International
Building Systems, Inc. ("AI Building"), merged with and into the Company. AI
Thermal performed cold storage construction services and AI Building
manufactured metal buildings and structural steel projects. The Company performs
these same services through two of its divisions.

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<PAGE>

In May 1994, AIC Management, Inc. ("AIC Management") merged with and into
the Company. Before the merger, AIC Management was wholly-owned by Messrs.
Clemons, Farrar and Wilson, each of whom is an officer, director and 29.47
percent stockholder of the Company. AIC Management was formed in February 1987
to provide management and consulting services to the construction industry,
however all such services were provided to the Company. Prior to the merger, AIC
Management owned the Company's office building and warehouse/assembly plant and
leased them to the Company.

In August 1994 and November 1994, respectively, the Company dissolved two
of its inactive, wholly-owned subsidiaries, Belko Construction, Inc. and AIC
Export Corporation.

Indebtedness To Major Supplier

As of October 31, 1996, the Company owed an aggregate of $3,313,000 to its
major supplier (the "Supplier"), of metal building components. This debt
consisted of $1,112,000 in accounts payable and $2,201,000 in principal and
interest under a note (the "Note") dated April 24, 1996 executed by the Company.

The Note is payable in installments and accrues interest at one percent
above the prime rate designated in The Wall Street Journal. The Company is
required to make consecutive weekly payments of $11,537 for outstanding accrued
interest and principal, until April 24, 2001 when the Note will have been paid
in full. The Company, which has the right to prepay the Note in full or in part
at any time without penalty, intends, and is required under the Loan Agreement,
to pay $1.2 million to reduce the principal on the Note from the proceeds of the
Offering. At the time this payment is made, the weekly payment on the Note will
be reduced so that the remaining principal balance will be amortized evenly,
including payments of interest, over the remaining term of the Note. If this
payment were made on December 31, 1996, the weekly payment on the Note would be
reduced from $11,537 to approximately $5,100. See "RISK FACTORS--Risk Factor No.
3" and "USE OF PROCEEDS".

Pursuant to the Loan Agreement effective April 24, 1996 between and among
the Supplier, the Company, and Danny and Teresa Clemons, Ralph and Judith
Farrar, Jim and Shirley Williams and John Wilson (collectively, the five
individuals are referred to as the "Guarantors"), the Note is secured by a
blanket security interest in all the Company's accounts, equipment, and
inventory, whenever acquired, and all proceeds and products of such assets
(collectively, the "Collateral"), subject only to security interests previously
granted to FCLT, L.P., a Texas limited partnership. The Collateral secures the
Note and all other obligations of the Company to the Supplier. The Company also
must provide the Supplier with monthly financial statements prepared in
accordance with generally accepted accounting principles and with audited annual
financial statements that are not subject to a qualification of the auditors'
opinion. The Loan Agreement prohibits the Company from assuming any additional
liabilities except for (a) accounts payable and unsecured liabilities to vendors
and suppliers, (b) up to $500,000 of private placement debt, and (c) those
expenditures for goods and services incurred in the ordinary course of business
on ordinary trade terms. The Company also is prohibited from: (i) compensating
any of the Guarantors who are employees of the Company in excess of $150,000 per
year during the term of the Loan Agreement, (ii) making any advances to third
parties other than in the ordinary course of business and advances to employees
for emergencies up to $25,000, (iii) investing in any other third parties, (iv)
making any capital expenditure in excess of $25,000 or cumulative capital
expenditures in excess of $120,000 in the aggregate annually, except for capital
expenditures made with proceeds of this Offering and except for trade debt
incurred in the ordinary course of business, (v) declaring or paying dividends,
(vi) changing its corporate organization by merger, consolidation, joint venture
or any other method without the written consent of the Supplier, (vii)

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<PAGE>

substantially changing its management personnel or the general character of its
business, and (viii) permitting the ratio of each of its current assets to
current liabilities to decrease below 60 percent, but notwithstanding the
foregoing, the Loan Agreement expressly states that the Company is in no way
inhibited or prohibited from undertaking an initial public offering of stock.
Pursuant to the Note and/or the Loan Agreement, if (a) any terms, covenants, or
other obligations under the Loan Documents are breached or any representation or
warranty is incorrect or materially misleading, (b) any judgment against any the
Company remains undischarged for a period of 90 days, (c) any Guarantor shall be
adjudicated bankrupt or dies and the life insurance proceeds are not first
applied to repay the Note, (d) the Company makes an assignment for the benefit
of creditors, files a petition in bankruptcy, is adjudicated bankrupt or becomes
insolvent, or (e) the Company fails to maintain earnings before interest expense
equal to at least 1.5% of gross revenues, then all of the outstanding amounts
due under the Note shall become immediately due and payable. In addition, upon
the occurrence of any of the above events, the Supplier may exercise its right
of offset against the Collateral. The Loan Agreement terminates upon the
satisfaction of all obligations of the Guarantors and the Company under the Loan
Documents. The Loan Agreement also requires that the Company use $1.2 million of
the proceeds from this Offering to reduce the balance of the Note. As indicated
above, when that payment is made, the weekly payment on the Note will be reduced
so that the remaining balance will be amortized evenly, including payments of
interest, over the remaining term of the Note. As of December 31, 1996, the
Company was in default of a number of covenants under the Loan Agreement, and
the Supplier agreed to waive these defaults. See "RISK FACTORS--Risk Factor No.
3-- Outstanding Indebtedness".

Also pursuant to the terms of the Loan Agreement, the Company and the
Supplier have agreed that, prior to commencement of this Offering, the Supplier
may review a draft of the Prospectus or Registration Statement used in
connection with this Offering and that the Company and the Supplier will attempt
to cooperate with one another in agreeing upon language in the Prospectus or
Registration Statement relating to the Supplier.

Pursuant to the Security Agreement-Pledge effective April 24, 1996, the
Company and Guarantors pledged to the Supplier all the issued and outstanding
stock of the Company and its subsidiaries that they respectively own, and they
agreed not to transfer or otherwise encumber any of these shares during the term
of the Loan Agreement. Further, the Company and Guarantors executed Irrevocable
Limited Stock Powers appointing the Supplier's legal counsel as attorney to
transfer the above stock to the Supplier in the event of a default under the
Loan Documents. The shares pledged as collateral are to be returned to the
Guarantors and the Company upon the payment of all amounts due under the Note.

The Guarantors also executed Continuing Guarantees to the Supplier
which fully guaranteed all outstanding amounts due under the Note in the event
of default under the Loan Documents.

FCLT Loans

As of October 31, 1996, the Company owed FCLT, L.P., a Texas limited
partnership ("FCLT"), an aggregate of approximately $349,000 (the "Debt") under
two loan agreements. See "RISK FACTORS--Outstanding Indebtedness".

One loan is evidenced by a promissory note in the face amount of $414,000,
with an outstanding principal balance of $269,000 at October 31, 1996. The
Company is required to make monthly payments on this note, including interest,
of $4,907 to FCLT until June 1998, at which time all outstanding principal and
interest become payable. The other loan is evidenced by a promissory note in the
face amount of $180,000, with an outstanding principal balance of $80,000 at
October 31, 1996. The Company is required to make monthly payments on this note,
including interest, of $1,175 to FCLT until June 1998, at which time all
outstanding principal and interest become payable. The Company's aggregate
monthly payments, including interest, currently are $6,082 to FCLT. Interest

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accrues on the outstanding Debt at the rate of 10 percent per annum until
maturity and at the rate of 18 percent per annum after maturity. The Company may
prepay part of or all the Debt at any time without penalty.

The Debt is secured by two Deeds of Trust on the Company's real property on
which the Company's offices and warehouse/assembly plant are located. In the
event that the Company sells any of this property, FCLT has the right to declare
the entire outstanding Debt immediately due and payable. The Debt is guaranteed
by each of Messrs. Wilson, Clemons and Farrar.

Government Regulation

The Company's business is subject to a variety of governmental regulations
and licensing requirements relating to construction activities. Prior to
commencing work on a project in the United States, the Company is required to
obtain building permits and, in some jurisdictions, a general contractor license
is required by the state or local licensing authorities. In addition, the
construction projects are required to meet federal, state and local code
requirements relating to construction, building, fire and safety codes. In order
to complete a project and obtain a certificate of occupancy, the Company is
required to obtain the approval of local authorities confirming compliance with
these requirements.

The Company is subject to similar and sometimes more onerous government
regulations and licensing requirements of any foreign countries in which it
operates. Although the Company has not researched the applicable laws of all
foreign countries, the Company is not aware of any significant impediments to
doing business in most other countries. If significant impediments do arise in
certain countries, the Company does not intend to pursue business there.

Employees

The Company has 155 employees including its Chief Executive Officer, the
Presidents for each of its three divisions, an in-house legal counsel, one Vice
President, five project managers, one Project Engineer, two project
coordinators, 4 estimators, a manager of manufacturing operations, 13 draftsmen,
8 salesmen, 20 superintendents, 36 shop workers, 40 to 50 construction
employees, a purchasing manager and a coordinator, five accounting personnel and
8 secretarial, administrative and clerical employees.

There are no family relationships among the Company's officers and
directors.

Properties

The Company occupies, approximately 16,000 square feet of space in an
office building and 21,450 square feet of space in a warehouse/assembly
plant/office at 14603 Chrisman, Houston, Texas. Both buildings, together with
the approximately 7.3 acres on which they are located, are owned by the Company.
The office building includes offices for the Company's metal buildings and
mini-warehouse operations as well as for the Company's administrative and
financial operations. The warehouse/assembly plant/office houses the Company's
metal buildings manufacturing operations. Both buildings are encumbered by the
Debt described under "FCLT Loans" and by the Note described under "Indebtedness
To Major Supplier". The Company also leases 824 square feet of space in Conroe,
Texas, for its cold storage construction services.

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<PAGE>

Legal Proceedings

No material legal proceedings, other than ordinary routine litigation
incidental to the business of the Company are pending in which the Company is a
party, or to which the property of the Company is subject, and no such material
proceeding is known by management of the Company to be contemplated.

-28-

<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

The selected financial data of the Company presented below for each of the
years in the five-year period ended April 30, 1996 are derived from the audited
consolidated financial statements of the Company for these periods. The selected
financial data presented for the nine-month periods ended October 31, 1996 and
1995 are derived from the unaudited consolidated financial statements included
elsewhere in this Prospectus, which in the opinion of management include all
normal and recurring adjustments necessary for fair presentation of information.
This information should be read in conjunction with the Consolidated Financial
Statements and Notes thereto and "Management's Discussion And Analysis Of
Financial Condition And Results Of Operations" included elsewhere in this
Prospectus. The selected consolidated financial data provided below is not
necessarily indicative of the future results of operations or financial
performance of the Company.

<TABLE>
<CAPTION>
Six Months
Years Ended April 30, Ended October 31
---------------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1995 1996
-------- -------- ---------- -------- -------- -------- ---------
Statement of Operations Data: in thousands, except per share data) (Unaudited)

<S> <C> <C> <C> <C> <C> <C> <C>
Contract revenues ............................. $ 19,918 $ 16,843 $ 25,845(1) $ 24,317 $ 31,185 $ 15,581 $ 18,089

Contract cost ................................. 18,277 13,905 22,566 20,812 27,204 13,959 16,244

Gross profit .................................. 1,641 2,938 3,279 3,505 3,981 1,622 1,845

Selling, general and administrative ........... 2,391 3,091 3,303 3,021 3,359 1,838 2,060

Provision for doubtful accounts ............... 30 35 156 48 62 35 254

Bridge financing costs ........................ -0- -0- -0- -0- -0- -0- 1,105

Interest and other financing costs ............ 79 192 219 188 184 93 159

Federal income tax expense .................... -- -- -- -- 35 -- --

Net income (loss) after pro forma ............. (565) (361) (420) 187 352 (332) (1,665)
income taxes

Net income (loss) per share after ............. (.19) (.12) (.14) .06 .12 (.11) (.57)
pro forma income taxes

Dividends paid per share ...................... .04 .03 .01 -0- -0- -0- -0-

-29-

<PAGE>
<CAPTION>
April 30, October 31
---------------------------------------------------------- ----------
1992 1993 1994 1995 1996 1996
-------- -------- ---------- -------- -------- ----------
Balance Sheet Data: (Unaudited)

<S> <C> <C> <C> <C> <C> <C>
Current Assets ........................... $ 3,026 $ 3,058 $ 4,581 $ 4,163 $ 5,944 $ 7,993

Current Liabilities ...................... 3,258 4,076 5,974 5,568 5,107 9,968

Working capital (deficiency) ............. (232) (1,018) (1,393) (1,405) 837 (1,975)

Total assets ............................. 4,382 4,265 5,717 5,487 7,346 9,739

Long-term debt ........................... 1,029 519 495 454 2,422 369

Stockholders' equity (deficit) ........... 94 (330) (759) (572) (220) (636)

</TABLE>

(1) See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS" for discussion of a non-recurring contract for $5.58
million that were performed during 1994.

(2) Prior to its acquisition during the year ended April 30, 1994, AIC
Management, Inc. was a nontaxable entity. Pro forma income taxes were
reflected herein as if AIC Management, Inc. had been a taxable entity for
the periods preceding its acquisition.

-30-

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results Of Operations

The following table sets forth for the periods indicated the percentages
that certain items are of total revenues and the percentage of change of that
ratio from the corresponding year-earlier period:

Percentage of Total Revenues Percentage Change From Prior Period
---------------------------------------------------- -----------------------------------
Six Months
Six Months Ended Ended
Year Ended April 30, October 31, Year Ended April 30, October 31,
----------------------------- ----------------- -------------------- -----------
1994 1995 1996 1995 1996 1995 1996 1996
------- ------- ------ ------ ------ ------- ------ -------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:

Contract revenues: ................... 100.0% 100.0% 100.0% 100.0% 100.0% (5.9%) 28.2% 16.1

Costs and expenses:

Contract costs: ......................... 87.3% 85.6% 87.2% 89.6% 89.9% (7.8%) 30.7% 16.4

Selling, general and ................. 12.8% 12.4% 10.8% 11.8% 11.4% (8.6%) 11.2% 12.1
administrative:

Provision for doubtful ............... .6% .2% .2% .2% 1.4% (69.2%) 28.3% 624.6%
accounts ----- ----- ----- ----- ----- ---- ---- -----

Private placement financing costs .... -- -- -- -- 6.1% -- -- 100.0%
----- ----- ----- ----- ----- ---- ---- -----

Interest and other
financing costs: ................... .8% .8% .6% .6% .8% (14.2%) (1.9%) 71.0%
----- ----- ----- ----- ----- ---- ---- -----

Total costs and expenses: ............... 101.5% 99.3% 98.7% 102.1% 109.2% (8.3%) 28.0% 69.4%
===== ===== ===== ===== ===== ==== ==== =====
</TABLE>

Six Months Ended October 31, 1996 Compared With Six Months Ended October
31, 1995.

For the six months ended October 31, 1996, the Company reported a net loss
of $1,665,000, or $.57 per share, on revenues of $18,089,000 as compared with a
net loss of $332,000, or $.11 per share, on revenues of $1,581,000. The increase
in net loss is primarily attributable to the following: (a) the Company recorded
a one time non-cash charge of $1,105,000 for private placement costs; and (b)
the Company incurred an expense of $200,000 as a provision for doubtful accounts
resulting from an anticipated loss for outstanding accounts receivable in the
amount of $325,000. The Company agreed to accept an offer of payment of $125,000
as full payment for the disputed account balance.

The total margins decreased .3% when comparing October 31, 1995 margin of
10.4% as compared to 10.1% at October 31, 1996. This decreased margin is
attributed to the metal building division which earned revenues of $8.8 million
with a margin of 5.2% for the six months ended October 31, 1996 as compared with
earned revenues of $4.1 million with a margin of 7.4% for the six months ended
October 31, 1995. This decline in overall margins was offset by the results of
improved margins within the mini-warehouse and Thermal Systems Divisions.

-31-

<PAGE>

The mini-warehouse division improved its margin to 14.1% on revenues of
$8.8 million for the six months ended October 31, 1996 as compared with a margin
of 12.0% on revenues of $11.1 million for the six months ended October 31, 1995.
In addition, the Thermal Systems Division earned revenues of $.5 million with a
margin of 18.0% for the six months ended October 31, 1996 as compared with
revenues of $.4 million with a margin of 10.6% for the comparable period in
1995.

Selling, general and administrative expenses as a percentage of revenues
decreased to 11.4% for the six months ended October 31, 1996 as compared with
11.8% for the six months ended October 31, 1995. This decrease in percentage is
a result of revenues increasing at a greater rate than expenses. The Company
anticipates that, to the extent that revenues continue to increase in the
future, of which there is no assurance, selling, general and administrative
expenses will increase at a lower rate.

Interest expense increased $67,000 from $93,000 for the six months ended
October 31, 1995 as compared with $159,000 for the six months ended October 31,
1996. This increase is the result of the conversion of accounts payables to
interest-bearing Notes Payable to Supplier effective April in 1996.

The Company's contract backlog as of October 31, 1996 was $17.6 million as
compared to $14.7 million as of October 31, 1995, an increase of $2.9 million,
which is primarily attributable to a $4.1 million increase in the backlog for
the metal building manufacturing division, a $2.2 million decrease in the
backlog for the mini-warehouse construction division, and a $1.0 million
increase for the thermal systems division.

Fiscal Year Ended April 30, 1996 Compared With Fiscal Year Ended April 30,
1995.

For the fiscal year ended April 30, 1996, the Company reported a net profit
of $352,000 or $.12 per share, on revenues of $31,185,000 as compared with net
profit of $187,000, or $.06 per share, on revenues of $24,317,000 for the prior
year. The increased profit resulted primarily from increased revenues and from a
reduction in selling, general and administrative expenses as a percentage of
revenues, which decreased to 10.8% of gross revenues in fiscal 1996 from 12.4%
of gross revenues in fiscal 1995. See discussion above of selling, general and
administrative expenses for the six months ended October 31, 1996 for additional
information.

The increase in total revenues from $24,317,000 in fiscal 1995 to
$31,185,000 in fiscal 1996 is due primarily to a large increase in sales of the
mini-warehouses and other general construction products. Although these
increased sales were realized at a lower overall gross profit margin, management
believes that the increase in volume more than justified growth in this area.
The decrease in gross profit margin was from 14.4% for fiscal 1995 to 12.8% for
fiscal 1996.

The Company's contract backlog as of April 30, 1996 decreased to
$12,079,000 from $13,055,000 as of April 30, 1995, which is primarily
attributable to a lower volume of mini-warehouse general construction products.
From April 30, 1994 to April 30, 1995, the Company's backlog increased from
$10,500,000 to $13,055,000, which also was primarily attributable to both the
metal building and mini-warehouse general construction products.

Interest expense decreased by $4,000 even though gross revenues increased
by almost $7 million in fiscal 1996. This was primarily due to a favorable

-32-

<PAGE>

financing agreement negotiated with its major supplier which allowed the Company
to substantially increase its existing outstanding accounts payable and
therefore reduce its borrowings to finance accounts receivables.

Fiscal Year Ended April 30, 1995 Compared With Fiscal Year Ended April 30,
1994.

For the fiscal year ended April 30, 1995, the Company reported a net profit
of $187,000, or $.06 per share, on total revenues of $24,317,000 as compared
with a net loss of $420,000, or $.14 per share, in fiscal 1994, on total
revenues of $25,845,000.

The decrease in revenues for fiscal 1995 as compared with fiscal 1994 is
primarily due to a large one-time contract for a cold storage facility in fiscal
1994. This contract resulted in revenues of $5,583,000 in fiscal 1994 versus
$1,268,000 in 1995.

The increase in profitability for fiscal 1995 over fiscal 1994 resulted
primarily from an increase in gross margin percentage from 12.7% in fiscal 1994
to 14.4% in fiscal 1995 and a reduction in selling general and administrative
expenses of $282,000 in fiscal 1995 as compared to fiscal 1994. The Company
experienced lower margins in fiscal 1994 as a result of the aforementioned cold
storage facility contract that contributed $5,583,000 of revenues during fiscal
1994. The Company accepted this contract at a "cost plus a fixed fee". The fixed
fee was well below the Company's usual profit margin, but management felt that
the increase in volume coupled with the relatively low risk of a cost plus
contract more than justified acceptance of this contract.

Selling, general and administrative expenses, as a percentage of gross
revenues, declined in fiscal 1995 to 12.4% from 12.8% in fiscal 1994. This was a
result of management's decision to manage international sales from its corporate
headquarters, and thereby eliminate overhead in other locations.

Interest expense decreased by $31,000 from fiscal 1994 to fiscal 1995
because of reduced borrowings to finance receivables during fiscal 1995.
Interest expense in connection with receivable financing amounted to $101,000 in
fiscal 1994 as compared to $58,000 for fiscal 1995. The Company was able to
lower its usage of receivable financing in fiscal 1995 because of the
improvement in gross margins and the reduction in overhead as previously
discussed.

Liquidity And Capital Resources

As of October 31, 1996, the Company had current assets of $7,993,000 and
current liabilities of $9,968,000 which represents a negative working capital of
$1,975,000. Working capital decreased $2,812,000 as compared to April 30, 1996.
As of April 30, 1996, the Company had current assets of $5,944,000 and current
liabilities of $5,107,000, which represents a positive working capital of
$837,000 as compared with a working capital deficit of $1,405,000 as of April
30, 1995. The $2,812,000 decrease in working capital is primarily the result of
recognizing the entire balance on the Note Payable to Supplier of $2,201,000 as
a current payable. See "RISK FACTORS--Risk Factor No. 3--Outstanding
Indebtedness" and "BUSINESS--Indebtedness To Major Supplier". The balance of the
decrease in working capital is attributed to the loss incurred from operations
for the six months ended October 31, 1996.

As of October 31, 1996 the Company's cash balance decreased $75,000 as
compared to the balance at April 30, 1996. This decrease is primarily

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<PAGE>

attributable to the Company's utilizing available cash to reduce notes payable
and capital lease obligations by $287,000 and costs associated with the
Company's initial public offering.

The Company's net cash flow is materially affected by the timing of
payments of accounts payable, other amounts owed, and collection of accounts
receivable. The Company's cash flow from operations increased by $199,000 for
fiscal 1996 as compared with fiscal 1995. The cash flow from operations for the
six months ended October 31, 1996 as compared to October 31, 1995 improved
$494,000 even though the Company incurred an increased loss from operations of
$1,333,000 which is primarily attributable to incurring a $1,105,000 non-cash
for Bridge financing costs.

For the fiscal year ending April 30, 1997, the Company is planning to make
capital expenditures described under "USE OF PROCEEDS", which assumes the
successful completion of this Offering. The current maturities of long-term debt
and capital lease obligations that are required to be paid during fiscal 1997
are approximately $551,000 in the aggregate. Management of the Company believes
that for fiscal 1997, the Company's anticipated cash flow from operations,
funding from this Offering, and its financing arrangement with its major
supplier, will be adequate for the Company to meet its requirements for
operations, debt service and necessary capital expenditures. See "RISK
FACTORS--Risk Factor No. 3--Outstanding Indebtedness". However, without the
successful completion of this Offering, the Company does not anticipate being
able to undertake the majority of the capital expenditures described under "USE
OF PROCEEDS" in the near future.

As indicated below and in the Company's financial statements, the Company
has experienced losses from operations in the past. However, the Company
believes that it will be able to continue to operate profitably in the future as
a result of increased operating volume and the benefits to be derived by it from
the proposed public offering described elsewhere in this prospectus.

As of October 31, 1996, the Company's backlog was $17.6 million as compared
with $14.7 million as of October 31, 1995. The Company anticipates increased
volume for fiscal 1997 and does not anticipate that its liquidity or capital
resources will be significantly altered by its operating results for fiscal
1997.

-34-

<PAGE>

MANAGEMENT

The Officers and Directors of the Company are as follows:

Name Age Position
- ---- --- --------
<S> <C> <C>

John T. Wilson ...... 42 Chief Executive Officer, Chairman Of The Board and Director

Danny R. ............ 46 President/Mini-Warehouse Division and Director
Clemons

Ralph L. Farrar ..... 49 President/Metal Buildings Division, Secretary and Director

Jim W. Williams ..... 42 Vice President/Finance, Chief Financial Officer, Assistant
Secretary and Director
</TABLE>

John T. Wilson has served as Chief Executive Officer of the Company since
May 1992 after having served as Vice President from May 1985 to May 1992. Mr.
Wilson also has served as a Director of the Company since its formation in May
1985 and as Chairman Of The Board since November 1994. In addition to his other
responsibilities as Chief Executive Officer, Mr. Wilson coordinates the
Company's marketing, administrative and financial activities. Mr. Wilson has in
excess of 22 years of experience working in the construction industry.

Danny R. Clemons has served as President of the Mini-Warehouse Division of
the Company since November 1994 after having served as President of the Company
from December 1986 to November 1994. Mr. Clemons also has served as a Director
of the Company since May 1985. Mr. Clemons has in excess of 25 years of
experience working in the construction industry.

Ralph L. Farrar has served as President of the Metal Buildings Division of
the Company since November 1994 and Secretary and a Director of the Company
since May 1985. Mr. Farrar also served as Treasurer of the Company from May 1985
to November 1994. Mr. Farrar has in excess of 27 years of experience working in
the construction industry.

Jim W. Williams has served as Vice President of Finance and Chief Financial
Officer of the Company since January 1990, and as a Director since June 1996.
From January 1989 to January 1990, Mr. Williams served as Controller of Care
Shipping, Inc., which engaged in the business of marine terminal and stevedoring
operations. From January 1981 to January 1989, Mr. Williams served as Treasurer
and Controller of Shippers Stevedoring, Inc., which engaged in the business of
marine terminal and stevedoring operations. Mr. Williams received a B.A. Degree
in Business Administration from Hardin-Simmons University in Abilene, Texas in
1977.

Another key employee of the Company is as follows:

Jimmy M. Rogers, 44, has been in charge of the Company's cold storage
services since September 1990 and has served as President of the Thermal Systems
Division of the Company since November 1994. From 1982 to September 1990, Mr.

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<PAGE>

Rogers served as Vice President of Cold Storage Construction Company, which
engaged in freezer and refrigerated unit installation. Mr. Rogers has in excess
of 12 years of experience working in the freezer and refrigerated installation
industry. Mr. Rogers received a B.S. Degree in Business Agriculture from
Hardin-Simmons University in Abilene, Texas in 1980.

There are no family relationships between any of the above officers,
directors and key employees of the Company.

If the Offering is successfully completed, for a period of five years
commencing after the closing of the Offering, the Underwriter will have the
right to designate to the Company's Board Of Directors one person to serve as an
advisor to or member of the Company's Board of Directors. The Company has not
been notified of whether the Underwriter intends to designate an advisor to or a
member of the Company's Board of Directors.

-36-

<PAGE>
EXECUTIVE COMPENSATION

The following table sets forth in summary form the compensation received
during each of the Company's last three completed fiscal years by certain
officers of the Company. No other employee of the Company, except as set forth
below, received total salary and bonus exceeding $100,000 during any of the last
three fiscal years.

<TABLE>
<CAPTION>
Summary Of Annual Compensation Table

Fiscal Year All Other
Name and Principal Ended Compensation
Position April 30, Salary ($) (1) ($) (2)
=====================================================================================

<S> <C> <C> <C>
John T. Wilson ....................... 1996 72,000 6,811
Chief Executive Officer, 1995 72,000 6,120
Chairman Of The 1994 107,406 13,648
Board and a director

Danny R. Clemons ..................... 1996 72,000 8,329
President/Mini- 1995 72,000 6,661
Warehouse Division 1994 107,406 13,678
and a director

Ralph L. Farrar ...................... 1996 72,000 8,286
President/Metal 1995 72,000 7,533
Buildings Division 1994 107,406 11,718
and a director

- -------------------------
</TABLE>

(1) The dollar value of base salary (cash and non-cash) received. Each of the
named individuals currently is receiving a salary of $85,000 per year. For
a description of employment agreements with the named individuals, see
below, "Employment Contracts And Termination Of Employment And
Change-In-Control Agreements".

(2) All other compensation received that the Company could not properly report
in any other column of the Summary Compensation Table, consisting of annual
Company contributions or other allocations to the Company's 401(k) plan,
amounts paid for group medical insurance premiums, amounts paid on behalf
of the named person for life insurance premiums, and "S" Corporation
dividends. The amounts shown consist of the following: 1996: John T. Wilson
- $1,184 for 401(k) contributions, $4,292 for group medical insurance
premiums, and $1,335 for life insurance premiums; Danny R. Clemons - $1,579
for 401(k) plan contributions, $4,292 for group medical insurance premiums,
and $2,458 for life insurance premiums; and Ralph L. Farrar - $1,184 for
401(k) plan contributions, $4,490 for group medical insurance premiums, and
$2,612 for life insurance premiums; 1995: John T. Wilson - $1,016 in 401(k)
contributions, $4,107 for group medical insurance premiums, and $997 for
life insurance premiums; Danny R. Clemons - $897 for 401(k) plan
contributions, $4,107 for group medical insurance premiums, and $1,657 for

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<PAGE>

for life insurance premiums; and Ralph L. Farrar - $1,016 for 401(k) plan
contributions, $4,681 for group medical insurance premiums, and $1,836 for
life insurance premiums; and 1994: John T. Wilson - $965 for 401(k) plan
contributions, $5,183 for group medical insurance premiums, and $7,500 for
"S" Corporation dividends; Danny R. Clemons - $995 for 401(k) plan
contributions, $5,183 for group medical insurance premiums, and $7,500 for
"S" Corporation dividends; and Ralph L. Farrar - $966 for 401(k) plan
contributions, $3,252 for group medical insurance premiums, and $7,500 for
"S" Corporation dividends.

Compensation Of Directors

The Company has no standard or other arrangement pursuant to which
directors of the Company are compensated for any services provided as a director
or for committee participation or special assignments.

Employment Contracts And Termination Of Employment And Change-In-Control
Arrangements

The Company has entered into three-year employment agreements that began on
January 1, 1995 with each of the following executive officers: John T. Wilson,
Danny R. Clemons, Ralph L. Farrar, and Jim W. Williams. Each of the agreements
is terminable at will and automatically renews for consecutive one-year terms
unless a party provides written notice of its desire not to renew. The annual
salary during the term of the agreements are the following amounts, although the
Board Of Directors of the Company may increase the salary in its sole
discretion: John T. Wilson, Danny R. Clemons, Ralph L. Farrar, and Jim W.
Williams, $85,000 each. The Company also will pay all the premiums on two
$500,000 term life insurance policies covering each of the above executive
officers, of which one policy covering each of them is a key-man policy for
which the Company is the beneficiary and the other policy is for the benefit of
a beneficiary designated by the respective executive officer.

The Company also has entered into a ten-year employment agreement with
Jimmy M. Rogers that became effective on May 1, 1993. This agreement is
terminable at will and automatically renews for consecutive one-year terms
unless either party provides written notice of its desire not to renew. The
annual salary during the term of the agreement is presently $66,000 although the
Board Of Directors of the Company may increase this amount in its sole
discretion. The agreement also provides for Mr. Rogers to receive the following:
(i) an incentive bonus equal to 18 percent of the annual net operating profit of
the thermal systems division of the Company; (ii) bonus payments of $17,000 on
November 16, 1993 and of $13,600 on each December 1 from and including 1994
through 1998, provided that he still is employed by the Company on those
respective dates; and (iii) payment by the Company of the premiums on a $1
million key-man life insurance policy covering Mr. Rogers, of which 50 percent
of the proceeds is distributable to the Company and 50 percent to a beneficiary
designated by Mr. Rogers.

The Company has no compensatory plan or arrangement that results or will
result from the resignation, retirement, or any other termination of an
executive officer's employment with the Company or from a change-in-control of
the Company, unless the Company terminates the employment of an executive
officer without cause before the full term of the employment agreement expires,
in which case the Company is required to pay three months salary to that
executive officer.

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<PAGE>

Compensation Committee Interlocks And Insider Participation.

The Company's Board Of Directors determines the compensation for the
Company's executive officers. The Company has no compensation committee or other
committee of the Board Of Directors that performs a similar function. Each of
the Company's current directors also is an executive officer of the Company.
John T. Wilson, Danny R. Clemons, and Ralph F. Farrar, each of whom is an
executive officer and employee of the Company, participated in deliberations of
the Company's Board Of Directors concerning executive officer compensation
during the fiscal year ended April 30, 1996. Jim W. Williams became a director
of the Company in June 1996. Mr. Williams also is the Vice President/Finance and
Chief Financial Officer of the Company.

-39-

<PAGE>

PRINCIPAL STOCKHOLDERS

The following table summarizes certain information as of December 26, 1996
with respect to the beneficial ownership of the Company's Common Stock (i) by
the Company's officers and directors, (ii) by stockholders known by the Company
to own five percent or more of the Company's Common Stock, and (iii) by all
officers and directors as a group.

<TABLE>
<CAPTION>
Amount And Na- Percent Of Percent Of
ture Of Beneficial Class Prior To Class After
Name And Address Of Beneficial Owner Ownership Offering Offering (1)
- ------------------------------------ --------- -------- ------------

<S> <C> <C> <C>
Danny R. Clemons(2) ........................ 707,319 24.4% 19.6%
14603 Chrisman
Houston, Texas 77039

Ralph L. Farrar(2) ......................... 707,319 24.4% 19.6%
14603 Chrisman
Houston, Texas 77039

John T. Wilson(2) .......................... 707,319 24.4% 19.6%
14603 Chrisman
Houston, Texas 77039

Jim W. Williams(2) ......................... 135,444 4.7% 3.8%
14603 Chrisman
Houston, Texas 77039

All Officers And Directors ................. 2,257,401 77.8% 62.7%
As A Group (Four Persons)(2)
- --------------------
</TABLE>

(1) Assumes that all the shares of Common Stock offered pursuant to this
Prospectus are sold, that none of the Warrants offered or previously
outstanding are exercised, and that the respective beneficial owners
listed in the table will not purchase any shares of Common Stock in
this Offering.

(2) All the shares owned by each of Messrs. Clemons, Farrar, Wilson and
Williams are pledged as collateral for the Company's indebtedness to
the Supplier as described under "BUSINESS--Indebtedness To Major
Supplier". If there were a default in this indebtedness and the
Supplier were to foreclose on the pledged shares, a change of control
of the Company could result. See "BUSINESS--Indebtedness To Major
Supplier".

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<PAGE>

TRANSACTIONS BETWEEN THE COMPANY AND RELATED PARTIES

Conflicts Of Interest Policy.

The Company has established a policy for considering transactions with
directors, officers, and shareholders of the Company and their affiliates.
Pursuant to this policy, the Board Of Directors of the Company will not approve
any such related party transactions unless the Board Of Directors has determined
that the terms of the transaction are no less favorable to the Company than
those available from unaffiliated parties. Because this policy is not contained
in the Company's Certificate Of Incorporation or Bylaws, this policy is subject
to change at any time by the vote of the Board Of Directors. It currently is not
contemplated that this policy will be changed. The Board has determined that the
transactions described below were made on terms no less favorable to the Company
than would have been available from unaffiliated parties.

Issuances And Transfers Of Stock.

The Company was incorporated in Texas on May 14, 1985. At that time, each
of John T. Wilson, Danny R. Clemons, and Ralph L. Farrar paid $250, or $.01 per
share, for 25,000 shares (an aggregate total of 75,000 shares) of stock of
American International Construction, Inc., a Texas corporation ("AIC-Texas").

In May 1994, AIC Management, Inc. merged with and into the Company. As part
of the merger, the shareholders of AIC Management, Inc. received an aggregate of
75,000 shares of the Company's common stock, which after its issuance
constituted 50 percent of the Company's outstanding shares. The shareholders of
AIC Management, Inc. at the time of the merger were John T. Wilson, Danny R.
Clemons and Ralph L. Farrar. In determining that the values of the two companies
were approximately equal, the Company and AIC Management, Inc. considered the
net book value of the assets of each, an appraisal of the value of the land and
a building owned by AIC Management, Inc., and their respective estimates of the
fair market value of the land and building.

In April 1992, each of John T. Wilson, Danny R. Clemons and Ralph L. Farrar
transferred to Jim W. Williams 3,000 shares of the common stock of AIC-Texas
owned by each of them respectively. The shares were given to Mr. Williams as an
incentive bonus.

Delaware Reincorporation And Capital Restructurings.

In June 1994, the Company changed its state of incorporation and effected a
16-for-1 stock split by forming a wholly owned Delaware subsidiary into which
the Company was merged. As a result of this transaction, the Company became a
Delaware corporation with 2,400,000 shares of Common Stock outstanding. All
references in this Prospectus to numbers of shares give effect to this stock
split and the issuance of 75,000 shares to the shareholders of AIC Management.

-41-

<PAGE>

Employment Agreements.

The Company is a party to employment agreements with each of its four
officers. These agreements are described under "EXECUTIVE COMPENSATION".

Interests In U.S. Storage, Inc. And U.S. Storage Management Services, Inc.

As of October 16, 1996, each of Danny Clemons, Leroy Farrar, and John T.
Wilson transferred to the Company all of their interests in U.S. Storage, Inc.
("U.S. Storage") and U.S. Storage Management Services, Inc. ("Management
Services"). U.S. Storage was formed for the purpose of owning mini-warehouse
facilities, and Management Services was formed for the purpose of providing
management services for mini-warehouse facilities. In exchange for these
transfers, each of Messrs. Clemons, Farrar and Wilson received the right to
receive eight and one-third percent of any cash distributions received by the
Company from U.S. Storage or its successors. Messrs. Clemons, Farrar, and Wilson
had acquired their respective interests in U.S. Storage consisting, for each of
them, of 25 percent of the common stock of U.S. Storage, in February 1996 for
$500 each. Messrs. Clemons, Farrar, and Wilson had acquired their respective
interests in Management Services, consisting, for each of them, of 25 percent of
the common stock of Management Services, in May 1996 for $250 each. On October
17, 1996, the Company exchanged all its interest in U.S. Storage for a 37.5
percent interest in U.S. Storage/Westheimer G.P.L.C. ("Westheimer") and it sold
all its interest in Management Services to a former employee for $15,000
including $7,500 cash and release of the Company from $7,500 in commissions owed
to the individual. Westheimer is involved in the ownership of mini-warehouse
facilities.

As of October 23, 1996, Messrs. Clemons, Farrar and Wilson each transferred
to Jim W. Williams, an officer and director of the Company, the right to receive
one and two-thirds percent of any cash distributions received by the Company
from U.S. Storage or its successors. As a result of these transfers, each of
Messrs. Clemons, Farrar and Wilson has the right to receive six and two-thirds
percent, and Mr. Williams has the right to receive five percent, of any cash
distributions received by the Company from U.S. Storage or its successors.

None of Messrs. Clemons, Farrar or Wilson ever has received any payment,
distribution, or other economic benefit from either U.S. Storage or Management
Services. In May 1996, prior to assignment of all the interests of Messrs.
Clemons, Farrar and Wilson in U.S. Storage and Management Services to the
Company, the Company entered into a contract with U.S. Storage/Westheimer, Ltd.
for the Company to construct a mini-warehouse facility for approximately $1.37
million. U.S. Storage/Westheimer, Ltd. is a limited partnership in which U.S.
Storage owns a 22.5 percent beneficial interest. The Company believes that the
terms of this contract were at least as favorable to the Company as the terms
and conditions of all other similar contracts for construction of mini-warehouse
facilities that the Company enters into with unrelated parties. As indicated
above, none of Messrs. Clemons, Farrar or Wilson has ever received any payment,
distribution or any other economic benefit from U.S. Storage or Management
Services, and each of these three individuals has transferred all of his
respective right, title, and interest in and to each of U.S. Storage and
Management Services to the Company.

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<PAGE>

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE

On August 5, 1994, Melton & Melton, L.L.P. ("Melton"), the Company's
independent accountant at that date, informed the Company that it is not
Melton's usual policy to issue audit opinions for inclusion in registration
statements filed with the Securities And Exchange Commission, and therefore,
Melton would not consent to the inclusion of its audit opinions in the Company's
registration statement. As a result, the Company engaged HEIN + ASSOCIATES LLP
as the Company's independent accountant, which decision was approved by the
Board Of Directors of the Company.

Melton's prior reports concerning the Company's financial statements did
not contain adverse opinions or disclaimers of opinion, and they were not
qualified as to uncertainty, audit scope or accounting principles. There have
been no disagreements with Melton on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure.

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<PAGE>

DESCRIPTION OF SECURITIES

The Company's authorized capital consists of 20 million shares of $.001 par
value Common Stock and one million shares of $1.00 par value Preferred Stock.
The Company's issued and outstanding capital as of July 31, 1996 consisted of
2,900,100 shares of $.001 par value Common Stock which were held by 35
stockholders and 3,000,000 Warrants held by 26 holders. The Company is offering
700,000 shares of Common Stock and 700,000 Warrants pursuant to this Prospectus.

Common Stock

Each share of the Common Stock is entitled to share equally with each other
share of Common Stock in dividends from sources legally available therefore,
subject to the rights of the Preferred Stock, when, as, and if declared by the
Board of Directors and, upon liquidation or dissolution of the Company, whether
voluntary or involuntary, to share equally in the assets of the Company that are
available for distribution to the holders of the Common Stock. Each holder of
Common Stock of the Company is entitled to one vote per share for all purposes,
except that in the election of directors, each holder shall have the right to
cast one vote per share for each nominee for director. Cumulative voting shall
not be allowed in the election of directors or for any other purpose, and the
holders of Common Stock have no preemptive rights, redemption rights or rights
of conversion with respect to the Common Stock. All outstanding shares of Common
Stock and all shares to be sold and issued upon exercise of the Warrants will be
fully paid and nonassessable by the Company. The Board Of Directors is
authorized to issue additional shares of Common Stock within the limits
authorized by the Company's Certificate Of Incorporation and without stockholder
action.

The Company has not paid any dividends during its last two fiscal years or
in any subsequent periods.

The Company has reserved a sufficient number of shares of Common Stock for
issuance in the event that all the Warrants are exercised. In addition, the
Company has reserved a sufficient number of shares of Common Stock for issuance
upon the exercise of options under the Company's 1994 Stock Option Plan.

The issuance of additional shares of Common Stock and other securities of
the Company is subject to the Underwriter's right of approval for two years
after the effective date of the Offering.

Common Stock Purchase Warrants

General. The redeemable Common Stock Purchase Warrants (the "Warrants")
offered by the Company are to be in registered form. They are tradeable
separately from the Common Stock. Each Warrant is exercisable at $5.00 per
Warrant during the period commencing on the date of this Prospectus and ending
five years from the date of this Prospectus. Although there currently is no plan
or other intention to do so, the Board Of Directors of the Company, in its sole
discretion, may extend the exercise period of the Warrants and/or reduce the
exercise price of the Warrants. It is anticipated that the Board would make such
a modification only if it deemed it to be in the Company's best interests.
Possible circumstances that may lead to modification of the terms of the
Warrants, of which there is no assurance, would include circumstances in which
the market price of the Company's Common Stock is less than the exercise price

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<PAGE>

of the Warrants and the Board would reduce the exercise price of the Warrants in
order to encourage their being exercised. This would be based on the Board's
belief that it would be in the Company's best interests to receive additional
capital funds from that source.

The exercise price of the Warrants was arbitrarily established and there is
no assurance that the price of the Common Stock of the Company will ever rise to
a level where exercise of the Warrants would be of any economic value to a
holder of the Warrants.

Current Registration Statement Required For Exercise. In order for a holder
to exercise that holder's Warrants, there must be a current registration
statement on file with the Securities and Exchange Commission and various state
securities commissions to continue registration of the issuance of the shares of
Common Stock underlying the Warrants. The Company intends to maintain a current
registration statement during the period that the Warrants are exercisable
unless the market price of the Common Stock underlying the Warrants would create
no economic incentive for exercise of the Warrants. If those circumstances were
to exist during the entire exercise period of the Warrants, the Warrants could
expire without the holders having had an opportunity to exercise their Warrants.

The maintenance of a currently effective registration statement could
result in substantial expense to the Company, and there is no assurance that the
Company will be able to maintain a current registration statement covering the
shares of Common Stock issuable upon exercise of the Warrants. Although there
can be no assurance, the Company believes that it will be able to qualify the
shares of Common Stock underlying the Warrants for sale in those states where
the Units are to be offered. The Warrants may be deprived of any value if a
current Prospectus covering the shares of Common Stock issuable upon exercise of
the Warrants is not kept effective or if the underlying shares are not qualified
in the states in which the Warrantholders reside.

Exercise Of Warrants. The Warrants may be exercised upon the surrender of
the Warrant certificate on or prior to the expiration of the exercise period,
with the form of "Election To Purchase" on the reverse side of the certificate
executed as indicated, and accompanied by payment of the full exercise price for
the number of Warrants being exercised. No rights of a stockholder inure to a
holder of Warrants until such time as a holder has exercised Warrants and has
been issued shares of Common Stock.

Redemption. The Warrants are redeemable by the Company at any time prior to
their exercise or expiration upon 30 days prior written or published notice,
provided however, that the closing bid quotation for the Common Stock for all 20
business days ending on the third day prior to the Company's giving notice of
redemption has been at least 150 percent of the then effective exercise price of
the Warrants. The redemption price for the Warrants will be $.01 per Warrant.
Any Warrant holder that does not exercise prior to the date set forth in the
Company's notice of redemption will forfeit the right to exercise the Warrants
and purchase the shares of Common Stock underlying those Warrants. Any Warrants
outstanding after the redemption date will be deprived of any value except the
right to receive the redemption price of $.01 per Warrant.

Tax Consequences Of Warrants. For federal income tax purposes, no gain or
loss will be realized upon exercise of a Warrant. The holder's basis in the
Common Stock received will be equal to the holder's basis in the Warrant
exercised, plus the amount of the exercise price. If the Warrant being exercised

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<PAGE>

has been purchased by the holder in this Offering, the holder's basis in the
Warrant will be determined based on the consideration paid for the Warrants. Any
loss realized by a holder of a Warrant due to a failure to exercise a Warrant
prior to the expiration of the exercise period will be treated for federal
income tax purposes as a loss from the sale or exchange of property that has the
same character as any shares of Common Stock acquired from the exercise of the
Warrants.

Warrant exercise price adjustments, or the omission of such adjustments,
may under certain circumstances be deemed to be distributions that could be
taxable as dividends for federal income tax purposes to holders of the Warrants
or the holders of the Common Stock.

The Internal Revenue Code provides that a corporation does not recognize
gain or loss upon the issuance, lapse or repurchase of a warrant to acquire its
own stock. Therefore, the Company will not recognize income upon the expiration
of any unexercised Warrants.

Preferred Stock

The Company is authorized to issue up to 1,000,000 shares of $1.00 par
value Preferred Stock.

The Board Of Directors of the Company has the right to fix the rights,
privileges and preferences of any class of Preferred Stock to be issued in the
future out of authorized but unissued shares of Preferred Stock and can issue
such shares after adopting and filing a Certificate Of Designations with the
Secretary Of State of Delaware. Any class of Preferred Stock that may be
authorized in the future may have rights, privileges, and preferences senior to
the Common Stock. The Company currently does not have a plan to authorize any
class of Preferred Stock.

The foregoing description concerning capital stock of the Company does not
purport to be complete. Reference is made to the Company's Certificate Of
Incorporation, Bylaws, and Underwriting Agreement which are filed as exhibits to
the Registration Statement of which this Prospectus is part, as well as to the
applicable statutes of the State of Delaware for a more complete description of
the rights and liabilities of stockholders.

The issuance of additional shares of Preferred Stock and other securities
of the Company is subject to the Underwriter's right of approval for one year
after the effective date of the Offering.

Registration Rights

Concurrently with the closing of the Offering, there is being registered on
behalf of the Selling Securities Holders an aggregate of 500,100 shares of
Common Stock and 3,000,000 Warrants issued in connection with the $300,000 loan
to the Company consummated in July 1996. The Selling Securities Holders have
entered into a Lock-Up Agreement which, in general, provides that the Selling
Securities Holders will not offer, sell, contract to sell or grant any option to
purchase or otherwise dispose of the shares of Common Stock or Warrants of the
Company issued to them in connection with the loan for a period of one year
after the Effective Date without the prior written consent of the Underwriter.
If the Underwriter does not consent to the sale of such securities concurrently
with the Offering, the Selling Security Holders will be entitled to certain
demand and "piggyback" registration rights with respect to the registration of
such shares under the Securities Act until ______, 1998. Generally, the Company

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<PAGE>

is required to bear the expense of all such registrations, except that the
Selling Securities Holders will be required to bear their pro rata share of the
underwriting discounts and commissions, if any. Substantially similar demand and
"piggyback rights" have also been granted to the Underwriter with respect to the
Underwriter's Warrant and the securities underlying the Underwriter's Warrant.

Delaware Law and Certain Charter Provisions

The Company is a Delaware corporation and subject to Section 203 of the
Delaware General Corporation Law (the "Delaware Law"), an anti-takeover law. In
general, Section 203 of the Delaware Law prevents an "interested stockholder"
(defined generally as a person owning 15% or more of the corporation's
outstanding voting stock) from engaging in a "business combination" (as defined)
with a Delaware corporation for three years following the date such person
became an interested stockholder, subject to certain exceptions such as the
approval of the Board of Directors and the holders of at least 66 2/3% of the
outstanding shares of voting stock not owned by the interested stockholder. The
existence of this provision would be expected to have the effect of discouraging
takeover attempts including attempts that might result in a premium over the
market price for the shares of Common Stock held by stockholders.

Transfer Agent

The Transfer Agent for the Common Stock and Warrants is American Securities
Transfer & Trust, Inc.

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<PAGE>

UNDERWRITING

The Company has entered into an Underwriting Agreement with I.A. Rabinowitz
& Co. (the "Underwriter"), which Underwriting Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
which governs the terms and conditions of the sale of the Common Stock and
Warrants offered hereby. Pursuant to the terms of the Underwriting Agreement,
the Underwriter, as the Company's exclusive agent, has agreed to purchase from
the Company on a firm commitment basis 700,000 shares of Common Stock at a price
of $5.00 per share and 700,000 Warrants at a price of $.10 per Warrant. Each
Warrant entitles its holder to purchase one share of Common Stock at an exercise
price of $ 5.00 per share.

The Company intends to have the Common Stock and Warrants quoted on the OTC
Bulletin Board, an electronic quotation system maintained by the NASD, under the
trading symbols "AICI" and "AICIW", respectively. There is no assurance that
quotation on the OTC Bulletin Board will occur or that a trading market will
develop for the Common Stock and/or Warrants. See "RISK FACTORS--Risk Factor No.
23. No Assurance Of Market For Common Stock Or Warrants".

The Company has granted to the Underwriters an option, solely to cover
over-allotments in the Offering, to purchase all or any part of 15 percent of
the total number of shares of the Common Stock and Warrants offered pursuant to
this Prospectus for a period of 30 days from the date of the closing of the
Offering at the price to public and subject to the discounts and commissions
described below.

The public offering price of the shares of Common Stock and the exercise
price of the Warrants were determined by negotiation between the Underwriter and
the Company. The Warrant offering price and other terms were determined
arbitrarily by negotiation between the Company and the Underwriter and do not
necessarily bear any direct relationship to the Company's assets, earnings or
other generally accepted criteria of value. Other factors considered in
determining the offering and exercise price of the Warrants include the business
in which the Company is engaged, the Company's financial condition, an
assessment of the Company's management, the general condition of the securities
markets and the demand for similar securities of comparable companies.

The Underwriter will receive a commission equal to 10% of the gross
proceeds from the sale of the Common Stock and Warrants sold or $357,000. The
Underwriter also will receive a non-accountable expense allowance in an amount
equal to 3% of the gross proceeds of this Offering of which $25,000 has been
paid to date.

The Underwriter has advised the Company that it proposes to offer the
shares and the Warrants to the public at the public offering price set forth on
the Cover Page of this Prospectus for each separate security, and that the
Underwriter may allow to certain dealers who are members of the NASD, and to
certain foreign dealers not eligible for membership in the NASD, concessions of
not in excess of $______ for each share of Common Stock and $ ______ for each
Warrant, of which amount a sum not in excess of $ _______ per share and $
_______ per Warrant may be re-allowed by such dealers to other dealers who are
members of the NASD and to certain foreign dealers not eligible for membership
in the NASD. After commencement of this Offering, the concession and the
re-allowance may be changed. No such modification shall change the amount of
proceeds to be received by the Company.

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<PAGE>

Pursuant to the Underwriting Agreement, the Company has agreed to sell to
the Underwriter, at a nominal cost, Underwriters' Warrants to purchase up to a
maximum of 70,000 shares of Common Stock and 70,000 Warrants, or one share of
Common Stock for each ten shares sold in this Offering and one Warrant for each
ten Warrants sold in this Offering. The Underwriter's Warrants will be
non-exercisable for one year after the date of this Prospectus. Thereafter, for
a period of four years, the Underwriter's Warrants will be exercisable at $5.00
per share of Common Stock and $.12 per Warrant. The Underwriter's Warrants are
not transferable for a period of one year after the date of this Prospectus,
except to officers and stockholders of the Underwriters and to members of the
selling group and its officers and partners. The Company has also granted one
demand and certain "piggy-back" registration rights to the holders of the
Underwriter's Warrants.

For the life of the Underwriter's Warrants, the holders thereof are given,
at a nominal cost, the opportunity to profit from a rise in the market price of
the Company's securities with a resulting dilution in the interest of other
stockholders. Further, the holders may be expected to exercise the Underwriter's
Warrants at a time when the Company would in all likelihood be able to obtain
equity capital on terms more favorable than those provided in the Underwriter's
Warrants.

The Underwriter has informed the Company that it does not expect any sales
of the Common Stock and Warrants offered hereby to be made to discretionary
accounts.

The Company may provide the Underwriter with the names of persons
contacting the Company with an interest in purchasing Common Stock or Warrants
in this Offering, and it is possible that the Company's officers, directors, and
employees will refer subscribers to the Underwriter. Although the Company will
not provide any names for the express purpose of closing the Offering, sales may
be made to those persons for that purpose. The Underwriter may sell a portion of
the Common Stock or Warrants offered hereby to such persons if they reside in a
state in which the Common Stock or Warrants can be sold. The Underwriter is not
obligated to sell any Common Stock or Warrants to such persons and will do so
only to the extent that such sales would not be inconsistent with the public
distribution of the shares. Neither the Company nor the Underwriter will
directly or indirectly arrange for the financing of such purchases, and the
proceeds of the Offering will not directly or indirectly be used for such
purchases. Officers, directors and stockholders of the Company may purchase
Common Stock or Warrants offered hereby.

For a period of five years after the closing of the Offering, the
Underwriter has the right to designate one person to serve as an advisor to or
member of the Company's Board of Directors. There is no restriction on whether
the person designated is a director, officer, partner, employee, or affiliate of
the Underwriter. The Underwriter has not yet informed the Company of whether it
intends to designate an advisor or director.

Upon the successful completion of this Offering, the Underwriter shall have
a preferential right for a period of three years from the date of this
Prospectus to purchase for its own account or to sell for the account of the
Company or any of the Company's subsidiaries or affiliates, any securities sold
in a public or private offering to raise capital and any sales of securities to
be made by the Company, its affiliates or any of its present or future
subsidiaries.

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<PAGE>

The Company will enter into on the date of this Prospectus a consulting
agreement with the Underwriter pursuant to which the Underwriter will receive a
consulting fee of $108,000, payable at the closing of the Offering, for services
to be rendered by the Underwriter to the Company for three years commencing on
the closing date of the Offering. Such services shall include but not be limited
to advising the Company in connection with management and financial matters and
possible acquisition opportunities.

The Underwriting Agreement provides that the Company will not sell any
shares of Common Stock, Preferred Stock, Warrants or options for a period of two
years following the date of this Prospectus without the Underwriter's consent
except that the Company may, without the Underwriter's consent, issue Common
Stock, or options pursuant to the Company's 1994 Stock Option Plan.

The Company also has agreed to engage the Underwriter as the warrant
solicitation agent on behalf of the Company for the solicitation of the exercise
of the Warrants commencing one year after the date of this Prospectus and
continuing for four years thereafter. The Underwriter will be paid a warrant
solicitation fee of five percent of the exercise price for each Warrant
exercised during that period. Unless granted an exemption by the Commission from
Rule 10b-6 under the Exchange Act, the Underwriter and any other soliciting
broker-dealers will be prohibited from engaging in any market-making activities
or solicited brokerage activities with regard to the Company's securities during
the periods prescribed by exemption (xi) to Rule 10b-6 before the solicitation
of the exercise of any Warrant until the later of the termination of such
solicitation activity or the termination of any right the Underwriter and any
other soliciting broker-dealer may have to receive a fee for the solicitation of
the exercise of the Warrants.

The Underwriting Agreement provides for reciprocal indemnification between
the Company and the Underwriter against certain liabilities in connection with
this Offering, including liabilities under the Securities Act. See "SECURITIES
AND EXCHANGE COMMISSION POSITION ON CERTAIN INDEMNIFICATION".

The foregoing does not purport to be a complete summary of the terms and
conditions of the Underwriting Agreement, copies of which are on file at the
offices of the Underwriter, the Company and the Securities And Exchange
Commission in Washington, D.C. See "ADDITIONAL INFORMATION".

There are no material relationships between the Company and the Underwriter
other than the relationships created by the Underwriting Agreement.

SECURITIES AND EXCHANGE COMMISSION POSITION
ON CERTAIN INDEMNIFICATION

The Company has agreed to indemnify directors, officers, and other
representatives of the Company for costs incurred by each of them in connection
with any action, suit, or proceeding brought by reason of their position as a
director, officer, or representative. This would include actions, suits, or
proceedings with respect to liability under the 1933 Act. To be eligible for
indemnification, the person being indemnified must have acted in good faith and
in a manner he or she reasonably believed to be in or not opposed to the best
interests of the Company.

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<PAGE>

The Board Of Directors is empowered to make other indemnification as
authorized by the Company's Certificate Of Incorporation, Bylaws, or corporate
resolutions so long as the indemnification is consistent with the General
Corporation Law Of Delaware. Under the Company's Bylaws, the Company is required
to indemnify its directors to the full extent permitted by the General
Corporation Law Of Delaware, the common law, and any other statutory provisions.
These provisions also may include indemnification for liabilities arising under
the 1933 Act.

In the Underwriting Agreement, the Company and the Underwriter have agreed
to indemnify each other against civil liabilities, including liabilities under
the 1933 Act. See "UNDERWRITING".

Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities And Exchange Commission such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable.

LEGAL MATTERS

Bearman Talesnick & Clowdus Professional Corporation, Denver, Colorado, has
acted as counsel for the Company in connection with this offering. Certain legal
matters will be passed upon for the Underwriter by Schneck Weltman Hashmall &
Mischel LLP, 1285 Avenue of the Americas, New York, New York.

EXPERTS

The audited financial statements of the Company appearing in this
Prospectus have been examined by HEIN + ASSOCIATES LLP, independent certified
public accountants, as set forth in their report appearing elsewhere herein, and
are included in reliance upon such report and upon the authority of said firm as
experts in accounting and auditing.

CONCURRENT OFFERING

The Registration Statement of which this Prospectus is a part also covers
500,100 shares of Common Stock and 3,000,000 warrants offered by the Selling
Securities Holders made pursuant to the Selling Securities Holders Prospectus.

ADDITIONAL INFORMATION

The Company has filed a Registration Statement under the Securities Act Of
1933 with respect to the securities offered hereby with the United States
Securities And Exchange Commission. This Prospectus does not contain all of the
information contained in the Registration Statement. For further information
regarding both the Company and the securities offered hereby, reference is made
to the Registration Statement, including all exhibits and schedules therein,
filed at the Commission's Washington, D.C. office. Copies of the Registration
Statement and exhibits are on file with the Commission and may be obtained, upon

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payment of the fee prescribed by the Commission, or may be examined free of
charge at the offices of the Commission, Public Reference Room, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission maintains a Worldwide Web
site at http:\\www.sec.gov that contains reports, proxies, and information
statements regarding registrants that file electronically with the Commission.

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FINANCIAL INFORMATION

Index To Financial Statements

Page No.

Independent Auditor's Report ................................................F-2

Financial Statements:

Consolidated Balance Sheets as of April 30, 1995 and 1996
and October 31, 1996 (unaudited)..................................F-3

Consolidated Statements Of Operations for each of the three years ended
April 30, 1994, 1995 and 1996 and for each of the nine months
ended October 31, 1995 and 1996 (unaudited).......................F-4

Consolidated Statements Of Stockholders' Equity (Deficit) for each of
the three years in the period ended April 30, 1996 and for the nine
months
ended October 31, 1996 (unaudited)................................F-5

Consolidated Statements Of Cash Flows for each of the three years ended
April 30, 1994, 1995 and 1996 and for each of the nine months
ended October 31, 1995 and 1996 (unaudited).......................F-6

Notes To Consolidated Financial Statements..........................F-7

Independent Auditor's Report Consolidated Financial
Statement Schedule................................................S-1

Schedule II - Consolidated Valuation and Qualifying Accounts........S-2

F-1

<PAGE>

INDEPENDENT AUDITOR'S REPORT

July 1, 1996

To the Stockholders
American International Consolidated, Inc.
Houston, Texas

We have audited the accompanying consolidated balance sheets of American
International Consolidated, Inc. and Subsidiaries as of April 30, 1995 and 1996,
and the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for each of the three years in the period ended April
30, 1996. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
American International Consolidated, Inc. and Subsidiaries as of April 30, 1995
and 1996, and the results of their operations and their cash flows for each of
the three years in the period ended April 30, 1996, in conformity with generally
accepted accounting principles.

/s/ HEIN + ASSOCIATES, LLP
HEIN + ASSOCIATES, LLP
Houston, Texas
July 1, 1996

F-2

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Consolidated Balance Sheets
April 30,
--------------------------- October 31,
1995 1996 1996
---------- ----------- ----------
(unaudited)
ASSETS
<S> <C> <C> <C>
Current assets:
Cash ..................................................................... $ 628,979 $ 265,949 $ 190,683
Accounts receivable:
Contracts, less allowance for doubtful accounts ....................... 2,677,558 4,874,421 5,966,316
Employee .............................................................. 11,815 26,543 20,410
Costs and estimated earnings in excess of billings on
uncompleted contracts ................................................. 709,635 645,420 1,648,751
Other current assets ..................................................... 134,788 131,725 167,311
------------ ------------ ------------
Total current assets ............................................... 4,162,775 5,944,058 7,993,471
------------ ------------ ------------

Property and equipment, net .................................................. 1,207,700 1,185,841 1,228,506
Other assets ................................................................. 116,616 216,184 517,192
------------ ------------ ------------

Total assets ....................................................... $ 5,487,091 $ 7,346,083 $ 9,739,169
============ ============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Note payable to financial institutions ................................... $ 408,889 $ -- $ --
Notes payable to stockholders, net of discount ........................... -- -- 99,999
Current portion of long-term debt and capital
lease obligation ...................................................... 469,635 552,264 2,374,233
Accounts payable ......................................................... 3,715,390 3,826,207 6,331,847
Accrued payroll and related expenses ..................................... 158,558 108,970 37,887
Billings in excess of costs and estimated earnings on
uncompleted contracts ................................................. 487,814 261,319 635,563
Other current liabilities ................................................ 328,000 358,524 488,878
------------ ------------ ------------
Total current liabilities .......................................... 5,568,286 5,107,284 9,968,407
------------ ------------ ------------
Long-term debt, net of current portion ....................................... 409,482 2,400,005 319,483
Capital lease obligation, net of current portion ............................. 44,386 22,287 49,851
Other liabilities ............................................................ 37,000 37,000 37,000
------------ ------------ ------------
Total liabilities .................................................. 6,059,154 7,566,576 10,374,741

Contingencies (Note 9)
Stockholders' equity (deficit):
Preferred stock, $1.00 par value; 1,000,000 shares
authorized; none issued ............................................... -- -- --
Common stock, $.001 par value; 20,000,000 shares
authorized; 2,400,000 shares issued and outstanding ................... 2,400 2,400 2,900
at April 30, 1995 and 1996; and 2,900,100 issued
and outstanding at October 31, 1996
Additional paid-in capital ............................................... 145,755 145,755 1,395,505
Accumulated deficit ...................................................... (720,218) (368,648) (2,033,977)
------------ ------------ ------------
Total stockholders' equity (deficit) ............................... (572,063) (220,493) (635,572)
------------ ------------ ------------
Total liabilities and stockholders' equity (deficit) ............... $ 5,487,091 $ 7,346,083 $ 9,739,169
============ ============ ============
</TABLE>

See accompanying notes to these consolidated financial statements.

F-3

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Consolidated Statements of Operations

Year Ended April 30, Six Months Ended October 31,
-------------------------------------------------- --------------------------------
1994 1995 1996 1995 1996
------------ ------------ ------------- ------------- ------------
(unaudited)

<S> <C> <C> <C> <C> <C>
Contract revenue .................... $ 25,844,725 $ 24,317,051 $ 31,184,828 $ 15,580,900 $ 18,088,507
Contract cost ....................... 22,565,928 20,812,194 27,204,243 13,958,876 16,243,640
------------ ------------ ------------ ------------ ------------
Gross profit .................... 3,278,797 3,504,857 3,980,585 1,622,024 1,844,867

Selling, general and
administrative .................. 3,303,466 3,020,997 3,359,653 1,838,008 2,060,106

Provision for doubtful
accounts ......................... 156,016 47,919 61,504 35,027 253,792

Other income (expense):
Interest and other
financing costs .............. (219,155) (187,908) (184,277) (93,245) (159,475)
Writeoff of capitalized
costs in connection
with delayed offering ........ -- (105,743) -- -- --
Private placement
financing costs ............. -- -- -- -- (1,105,249)
Interest income and
other, net ................ (20,618) 44,372 11,419 12,238 68,426
------------ ------------ ------------ ------------ ------------
Income (loss) before federal
income taxes .................... (420,458) 186,662 386,570 (332,018) (1,665,329)
------------
Federal income tax (expense)
benefit ......................... -- -- (35,000) -- --
------------ ------------ ------------ ------------ ------------
Net income (loss) ................... $ (420,458) $ 186,662 $ 351,570 $ (332,018) $ (1,665,329)
============ ============ ============ ============ ============
Net income (loss) per share ......... $ (.14) $ .06 $ .12 $ (.11) $ (.57)
============ ============ ============ ============ ============
Weighted average common
shares outstanding .............. 2,910,000 2,910,000 2,910,000 2,910,000 2,910,000
============ ============ ============ ============ ============
</TABLE>

See accompanying notes to these consolidated financial statements.

F-4

<PAGE>
<TABLE>
<CAPTION>
AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity (Deficit)

Common Stock Additional
-------------------------- Paid-In Accumulated
Shares Amount Capital Deficit Total
--------- --------- ----------- ----------- ----------

<S> <C> <C> <C> <C> <C>
Balances, May 1, 1993 ............................ 2,400,000 $ 2,400 $ 15,621 $ (348,048) $ (330,027)

Net loss ..................................... -- -- -- (420,458) (420,458)
142,599 shares of common stock
transferred by the major stock-
holders at estimated fair market
value ..................................... -- -- 14,260 -- 14,260
Distributions to AIC Management,
Inc. stockholders ......................... -- -- -- (22,500) (22,500)
Conversion of AIC Management,
Inc. from a non-taxable to
taxable entity ............................ -- -- 115,874 (115,874) --
----------- ----------- ----------- ----------- -----------
Balances, April 30, 1994 ......................... 2,400,000 2,400 145,755 (906,880) (758,725)

Net income ................................... -- -- -- 186,662 186,662
----------- ----------- ----------- ----------- -----------
Balances, April 30, 1995 ......................... 2,400,000 2,400 145,755 (720,218) (572,063)

Net income ................................... -- -- -- 351,570 351,570
----------- ----------- ----------- ----------- -----------

Balances, April 30, 1996 ......................... 2,400,000 2,400 145,755 (368,648) (220,493)

Common stock issued in
connection with private
placement financing
(unaudited) ............................... 500,100 500 1,249,750 -- 1,250,250

Net loss (unaudited) ......................... -- -- -- (1,665,329) (1,665,329)
----------- ----------- ----------- ----------- -----------
Balances, October 31, 1996
(unaudited) .................................. 2,900,100 $ 2,900 $ 1,395,505 $(2,033,977) $ (635,572)
=========== =========== =========== =========== ===========
</TABLE>

See accompanying notes to these consolidated financial statements.

F-5

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Year Ended April 30, Six Months Ended October 31,
---------------------------------------- ----------------------------
1994 1995 1996 1995 1996
----------- ---------- ---------- ----------- ----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) ................................... $ (420,458) $ 186,662 $ 351,570 $ (332,018) $(1,665,329)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Fair value of common stock
issued in connection with
private placement financing ................... -- -- -- -- 1,050,249
Depreciation and amortization .................... 137,492 141,176 170,123 92,591 82,598
(Increase) decrease in:
Receivables, net .............................. (200,705) (12,353) (2,211,591) (861,979) (1,085,762)
Costs and estimated earnings
in excess of billings on
uncompleted contracts ..................... (1,072,648) 673,380 64,215 (281,005) (1,003,331)
Other current assets .......................... 26,262 (96,016) 3,063 29,476 (41,586)
Increase (decrease) in:
Accounts payable .............................. 2,272,397 (415,777) 2,510,817 704,193 2,505,640
Billings in excess of costs and
estimated earnings ........................ 88,759 98,668 (226,495) 212,870 374,244
Other current liabilities ..................... 240,665 (74,152) (19,064) 226,305 65,660
Other, net ....................................... 165,096 (55,788) 1,130 (71,060) (69,300)
----------- ----------- ----------- ----------- -----------
Net cash provided by (used
in) operating activities .................. 1,236,860 445,800 643,768 (280,627) 213,083

Cash flows from investing activities:
Capital expenditures ................................ (13,842) (169,485) (148,264) (117,241) (68,931)
Proceeds from sale of investments ................... -- 19,050 -- -- --
----------- ----------- ----------- ----------- -----------
Net cash used in investing
activities ................................ (13,842) (150,435) (148,264) (117,241) (68,931)

Cash flows from financing activities:
Net borrowings (payments) under
receivables factoring agreements ................. (460,808) 177,239 (408,889) 28,515 --
Proceeds from notes payable to
stockholders ..................................... -- -- -- -- 300,000
Issuance of long-term debt .......................... -- 173,585 -- -- --
Principal payments on long-term
debt, capital leases and other
notes payable .................................... (342,796) (439,303) (348,947) (190,854) (287,321)
Other ............................................... -- (60,325) (98,438) (53,648) (232,097)
Distributions to stockholders ....................... (22,500) -- -- -- --
----------- ----------- ----------- ----------- -----------
Net cash used in financing activities ......... (826,104) (148,804) (856,274) (215,987) (219,418)
----------- ----------- ----------- ----------- -----------

Net increase (decrease) in cash ......................... 396,914 146,561 (360,770) (613,855) (75,266)

Cash, beginning of period ............................... 85,504 482,418 628,979 628,979 265,949
----------- ----------- ----------- ----------- -----------

Cash, end of period ..................................... $ 482,418 $ 628,979 $ 268,209 $ 15,124 $ 190,683
=========== ========== =========== =========== ============

- Continued -

See accompanying notes to these consolidate financial statements.

F-6

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

See accompanying notes to these consolidated financial statements.

F-7

<PAGE>

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Notes To Consolidated Financial Statements
(Information Subsequent to April 30, 1996 is Unaudited)

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization: The accompanying consolidated financial statements include the
accounts of American International Consolidated, Inc. (AIC), a Delaware
corporation, and its wholly-owned subsidiaries: C.H.O.A. Construction Company
and L. Campbell Construction, Inc., which is currently inactive. Effective July
26, 1996, the Company changed its name from American International Construction
Inc. to American International Consolidated, Inc. Effective April 30, 1994,
American International Construction, Inc., a Texas corporation, exchanged 75,000
shares of its common stock for the outstanding shares of AIC Management, Inc., a
corporation wholly owned by the stockholders of AIC. This acquisition was
accounted for in a manner which approximated the purchase method of accounting.
In June 1994, American International Construction , Inc., a Texas corporation,
formed AIC, a Delaware corporation, as a wholly-owned subsidiary. Subsequent to
this, the Texas corporation was merged into the Delaware corporation in a
reverse tax-free exchange. All significant intercompany balances and
transactions have been eliminated in consolidation.

The Company is primarily engaged in the design and erection of metal buildings
for use as self-storage, commercial and cold storage facilities and fabrication
of metal building components. The Company also participates in major
construction projects as a general contractor.

Revenue and Cost Recognition: Profits and losses on construction and fabrication
contracts are recorded on the percentage-of-completion method of accounting,
measured by the percentage of contract costs incurred to date to estimated total
contract costs for each contract. Contract costs include raw materials, direct
labor, amounts paid to subcontractors and an allocation of overhead expenses.
General and administrative costs are charged to expense as incurred. Anticipated
losses on uncompleted construction contracts are charged to operations as soon
as such losses can be estimated. Changes in job performance, job conditions,
estimated profitability and final contract settlements may result in revisions
to costs and income and are recognized in the period in which the revisions are
determined.

The asset, "costs and estimated earnings in excess of billings on uncompleted
contracts", represents revenues recognized in excess of amounts billed. The
liability, "billings in excess of costs and estimated earnings on uncompleted
contracts", represents billings in excess of revenues recognized.

Cash: Cash includes all highly liquid investments with original maturities of
less than three months.

Property and Equipment: Property and equipment is carried at cost. Property and
equipment acquired through capital leases is stated at the present value of the
future minimum lease payments at the inception of the lease. Depreciation is
computed using the straight-line method over the estimated useful lives of the
assets. Property and equipment held under capital leases is amortized on the
straight-line method over the lesser of the asset's estimated useful life or the
term of the lease. When assets are retired or otherwise disposed of, the cost
and related accumulated depreciation are removed from the accounts, and any
resulting gain or loss is recognized in operations for the period. The cost of
maintenance and repairs are expensed as incurred; however, significant
refurbishments or improvements are capitalized.

F-8

<PAGE>
AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Notes To Consolidated Financial Statements
(Information Subsequent to April 30, 1996 is Unaudited)

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

Federal Income Taxes: AIC files a consolidated federal income tax return, which
includes the results of its operations and those of its wholly-owned
subsidiaries. The Company accounts for income taxes in conformity with Statement
of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes.
Under SFAS No. 109, deferred income taxes are recognized for the tax
consequences of temporary differences by applying enacted statutory tax rates
applicable to future years to differences between the financial statement
carrying amounts and the tax basis of existing assets and liabilities. Income
tax expense or benefit represents the current tax payable or refundable for the
period plus or minus the tax effect of the net change in the deferred tax assets
and liabilities.

Prior to its acquisition in fiscal 1994, AIC Management, Inc. was a subchapter S
corporation, as provided under the Internal Revenue Code. Accordingly, the
taxable income or loss for this entity was reported in the stockholders'
individual tax returns.

Deferred Offering Costs: Direct costs incurred in connection with the Company's
proposed offering of common stock have been capitalized in the accompanying
balance sheet. Upon closing of the proposed offering, these costs, which amount
to $390,860 at October 31, 1996, will be applied as a reduction of the offering
proceeds.

Deferred Financing Costs: Direct costs incurred in the origination of debt are
capitalized and amortized over the related term of the debt on the interest
method.

Use of Estimates: The preparation of the Company's consolidated financial
statements, in conformity with generally accepted accounting principles,
requires the Company's management to make estimates and assumptions that affect
the amounts reported in these financial statements and accompanying notes.
Actual results could differ from those estimates.

New Accounting Standards: The Financial Accounting Standards Board issued SFAS
No. 121 entitled, Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of, which is effective for fiscal years beginning after December 15,
1995. SFAS No. 121 specifies certain events and circumstances which indicate the
cost of an asset or assets may be impaired, the method by which the evaluation
should be performed and the method by which writedowns, if any, of the asset or
assets are to be determined and recognized. SFAS No. 121 had no material impact
on the Company's financial condition or operating results upon implementation.

The FASB also issued SFAS No. 123 entitled, Accounting for Stock Based
Compensation, effective for fiscal years beginning after December 15, 1995. This
statement allows companies to choose to adopt the statement's new rules for
accounting for employee stock-based compensation plans. For those companies
which choose not to adopt the new rules, the statement requires disclosures as
to what earnings and earnings per share would have been if the new rules had
been adopted. Management adopted the disclosure requirements of this statement
in fiscal 1997.

Net Income (Loss) Per Share and Common Stock Split: Net income (loss) per share
is based upon the weighted average common shares outstanding. All share and per
share amounts in the accompanying financial statements have been adjusted to
reflect a 16 to 1 stock split which was authorized in June 1994. There were no
common stock equivalents during the years presented. For purposes of determining
the weighted average common shares outstanding, the 500,100 shares of common
stock issued in connection with the bridge financing (see Note 18) were deemed
to be outstanding for all periods presented.

F-9
<PAGE>
AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Notes To Consolidated Financial Statements
(Information Subsequent to April 30, 1996 is Unaudited)

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

Unaudited Interim Information: The consolidated balance sheet as of October 31,
1996 and the consolidated statements of operations for the six-month periods
ended October 31, 1995 and 1996 were taken from the Company's books and records
without audit. However, in the opinion of management, such information includes
all adjustments (consisting only of normal recurring accruals), which are
necessary to properly reflect the financial position of the American
International Consolidated, Inc. and Subsidiaries as of October 31, 1996 and the
results of their operations and their cash flows for the six months ended
October 31, 1995 and 1996. The results of operations for the interim periods
presented are not necessarily indicative of the results to be expected for the
year.

NOTE 2 - HISTORICAL OPERATIONS

The Company experienced substantial losses prior to fiscal 1995 and has an
accumulated deficit of $479,548 at April 30, 1996. The Company's ability to
continue to fund its future operating and capital needs is dependent upon its
ability to continue profitable operations and to generate adequate cash flows
from operations. For the year ended April 30, 1996, the Company reported net
income of $351,570, cash flow from operations of $644,898 and an increase in its
working capital to $836,774 as a result of converting $2,400,000 of trade
accounts payable to long-term debt. For the six-month period ended October 31,
1996, the Company incurred a net loss of $1,665,329, of which $1,050,249
represented noncash costs associated with the Company's bridge financing (see
Note 13), positive cash flow from operations of $213,083. As of October 31,
1996, the Company had negative working capital of $1,975,886, primarily as a
result of the classification of the entire balance of the note payable to
supplier (see Note 8) in current liabilities.

NOTE 3 - CONCENTRATION OF CREDIT RISK

The Company provides construction services to commercial companies primarily in
the continental United States which are principally concentrated in Texas and
Florida. The Company performs ongoing credit evaluations of its customers and
generally does not require collateral. The Company assesses its credit risk and
provides an allowance for doubtful accounts for any accounts which it deems
doubtful of collection.

The Company maintains deposits in banks which may exceed the amount of federal
deposit insurance available. Management believes that the risk of any possible
deposit loss is minimal.

F-10

<PAGE>

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Notes To Consolidated Financial Statements
(Information Subsequent to April 30, 1996 is Unaudited)

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:
<TABLE>
<CAPTION>

April 30,
------------------------- October 31,
1995 1996 1996
---------- ---------- ----------

<S> <C> <C> <C>
Land ......................................... $ 167,461 $ 167,461 $ 167,461
Buildings .................................... 825,172 834,944 834,944
Construction equipment ....................... 213,575 213,575 265,321
Office equipment ............................. 445,385 583,877 657,394
Automobiles .................................. 296,471 296,471 296,471
----------- ----------- -----------
1,948,064 2,096,328 2,221,591
Less accumulated depreciation and amortization (740,364) (910,487) (993,084)
----------- ----------- -----------

$ 1,207,700 $ 1,185,841 $ 1,228,507
=========== =========== ===========
</TABLE>

NOTE 5 - CONSTRUCTION ACCOUNTS

Costs and billings on uncompleted contracts consists of the following:
<TABLE>
<CAPTION>
April 30,
--------------------------- October 31,
1995 1996 1996
----------- ----------- -----------

<S> <C> <C> <C>
Costs incurred on uncompleted contracts ...... $ 5,171,015 $ 7,739,410 $ 12,355,987
Estimated earnings on uncompleted contracts .. 456,387 1,239,522 1,844,526
------------ ------------ ------------
5,627,402 8,978,932 14,200,513
Less: Billings to date ...................... (5,405,581) (8,594,831) (13,187,325)
------------ ------------ ------------

$ 221,821 $ 384,101 $ 1,013,188
============ ============ ============

Included in the accompanying consolidated
balance sheet under the following captions:
Costs and estimated earnings in excess of
billings on uncompleted contracts ...... $ 709,635 $ 645,420 $ 1,648,751
Billings in excess of costs and estimated
earnings on uncompleted contracts ...... (487,814) (261,319) (635,563)
------------ ------------ ------------

$ 221,821 $ 384,101 $ 1,013,188
============ ============ ============

</TABLE>

F-11

<PAGE>

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Notes To Consolidated Financial Statements
(Information Subsequent to April 30, 1996 is Unaudited)

NOTE 6 - CONTRACTS RECEIVABLE

Contracts receivable consisted of the following:
<TABLE>
<CAPTION>

April 30,
------------------------- October 31,
1995 1996 1996
---------- ---------- ----------

<S> <C> <C> <C>
Completed contracts ................ $ 1,138,660 $ 1,458,204 $ 1,729,194
Uncompleted contracts .............. 1,350,298 3,158,551 3,771,615
Retainage .......................... 285,653 337,523 528,885
----------- ----------- -----------
2,774,611 4,954,278 6,029,694
Less allowance for doubtful accounts (97,053) (79,857) (63,378)
----------- ----------- -----------
$ 2,677,558 $ 4,874,421 $ 5,966,316
=========== =========== ===========
</TABLE>

NOTE 7 - NOTES PAYABLE TO FINANCIAL INSTITUTIONS

The Company had a credit line with a financing company under which certain of
the Company's contract receivables are purchased at a discount of 9%. The
Company was refunded a portion of the discount provided the receivable was
collected promptly. The agreement was guaranteed by the Company's four principal
stockholders, all of whom are officers, and three of whom are directors of the
Company. The outstanding balance under this credit agreement was $408,889 as of
April 30, 1995. This credit line was terminated effective April 24, 1996.

NOTE 8 - LONG-TERM DEBT

Long-term debt consists of the following:
<TABLE>
<CAPTION>
April 30,
-------------------------- October 31,
1995 1996 1996
--------- --------- -----------

<S> <C> <C> <C>
Note payable to supplier, due in weekly
installments of $11,537, including
interest at prime plus 1% (9.25% at
October 31, 1996) through April 30, 2001.
The note is collateralized by certain
contract receivables, inventory, equip-
ment, land, buildings and substantially
all shares of the Company's common stock.
The note is guaranteed by the four
stockholders of the Company. If the
Company completes the initial public
offering described in Note 17, $1,200,000
of the remaining principal is immediately
payable under the provisions of the loan
agreement and the weekly payment will be
reduced to provide for amortization at an
even rate over the remaining term of the
note. $ -- $ 2,400,000 $ 2,201,352

- Continued -

F-12

<PAGE>

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Notes To Consolidated Financial Statements
(Information Subsequent to April 30, 1996 is Unaudited)

NOTE 8 - LONG-TERM DEBT (continued)

<CAPTION>
April 30,
-------------------------- October 31,
1995 1996 1996
--------- --------- -----------

<S> <C> <C> <C>
Note payable to supplier, due in weekly
installments of $6,000, including interest
at prime plus 1% (10% at April 30, 1995)
through March 1, 1996. The note was repaid
during fiscal 1996. 229,588 -- --

Note payable to a bank, due in monthly
installments of $4,907, including interest
at 8.75% (10% beginning March 15, 1995)
through June 1998 when the remaining
principal is due. The note is
collateralized by the Company's land and
buildings and guaranteed by three
principal stockholders of the Company. 314,150 289,153 269,314

Note payable to a bank, due in monthly
installments of $1,175, including interest
at 8.75%, (10% beginning March 15, 1995)
with a final payment of principal and
interest due the earlier of 30 days after
consummation of a proposed public offering
or June 5, 1998. The note is
collateralized by a second lien on the
Company's land and buildings and
guaranteed by three principal stockholders
of the Company. 88,038 83,416 79,564

Real estate note payable, due in monthly
installments of $1,018, including interest
at 8.7%, through October 1998. The note is
col-lateralized by a first lien on a
portion of the Company's land. 36,021 26,556 19,737

Notes payable to the State of Florida for
sales and use tax, due in monthly
installments of $7,930, including interest
at 12%, through June 1997. 168,584 135,042 92,716

Other equipment and automobile notes 21,979 1,228 --
---------- ----------- ---------
858,360 2,935,395 2,662,683
Less: Current maturities (448,878) (535,390) (2,343,200)
---------- ----------- ---------
$ 409,482 $ 2,400,005 $ 319,483
========== =========== =========
</TABLE>

F-13

<PAGE>

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Notes To Consolidated Financial Statements
(Information Subsequent to April 30, 1996 is Unaudited)

The note payable to supplier includes various financial covenants, among other
things, which require the Company to limit its capital expenditures, without
prior approval of the supplier, to $120,000 annually, submit audited financial
statements within 90 days of year end, prohibit the payment of dividends,
require the Company to maintain a ratio of current assets to current liabilities
of at least .60 to 1 and maintain earnings before interest expense of at least
1.5% of gross revenues. The Company is in violation of certain of these debt
covenants. Accordingly, the entire balance of this note was classified as
current in the accompanying balance sheet. The distributions to AIC Management,
Inc. in fiscal year 1994 preceded the merger of the Company and AIC Management,
Inc. and therefore were not in violation of the loan covenants. The Company also
had trade payables due this supplier of $1,758,352; $1,065,825 and $1,111,731 at
April 30, 1995 and 1996 and October 31, 1996, respectively.

Scheduled maturities of long-term debt are as follows:

Year Ending October 31,
-----------------------
1997 $ 550,310
1998 507,760
1999 765,467
2000 553,140
2001 286,006
----------
$2,662,683
==========

NOTE 9 - CONTINGENCIES

The owner of one of the Company's construction projects has disputed some of the
costs charged to a job which was completed in the fourth quarter of fiscal 1996.
The Company settled this dispute during November 1996 for $125,000, resulting in
a reduction in amounts due from this owner by $200,000 during the second quarter
of fiscal 1997.

Additionally, the Company is involved in various other claims and legal actions
arising in the ordinary course of business. In the opinion of management, the
ultimate disposition of these matters will not have a material adverse effect on
the Company's consolidated financial condition, liquidity or results of
operations.

NOTE 10 - STOCKHOLDERS' EQUITY

In October 1993, the four stockholders of the Company transferred an aggregate
of 142,599 shares of the Company's common stock as a consideration for services
provided to the Company. Expense of $14,260 was recognized in fiscal 1994 for
the estimated fair value of the shares transferred.

The Company may issue one or more series of preferred stock, with such
designations, preferences, rights, dividends and restrictions as may be
determined by the Board of Directors.

F-14

<PAGE>

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Notes To Consolidated Financial Statements
(Information Subsequent to April 30, 1996 is Unaudited)

NOTE 11 - FEDERAL INCOME TAXES

Deferred tax assets and liabilities as of April 30, 1995 consisted of the
following:
<TABLE>
<CAPTION>

Current Noncurrent Total
-------- ---------- -------

<S> <C> <C> <C>
Deferred tax assets:
Net operating loss carryforwards ....... $ 157,000 $ -- $ 157,000
Deferred compensation and other accruals 27,700 -- 27,700
Other, net ............................. 62,300 -- 62,300
--------- --------- ---------
Total deferred tax asset ............. 247,000 -- 247,000

Less: Valuation allowance ................ (210,000) -- (210,000)
--------- --------- ---------
Deferred tax asset, net ................... 37,000 -- 37,000
--------- --------- ---------
Deferred tax liability - accumulated
depreciation ............................ -- (37,000) (37,000)
--------- --------- ---------
$ 37,000 $ (37,000) $ --
========= ========= =========
</TABLE>

Deferred tax assets and liabilities as of April 30, 1996 consisted of the
following:
<TABLE>
<CAPTION>
Current Noncurrent Total
-------- ---------- -------
<S> <C> <C> <C>
Deferred tax asset - deferred
compensation and other accruals ........ $ 52,000 $ -- $ 52,000

Less: Valuation allowance ................ (9,000) -- (9,000)
-------- -------- --------
Deferred tax asset, net ................... 43,000 -- 43,000
-------- -------- --------
Deferred tax liability - accumulated
depreciation ........................... -- (37,000) (37,000)
-------- -------- --------
$ 43,000 $(37,000) $ 6,000
======== ======== ========
</TABLE>
NOTE 12 - EMPLOYEE BENEFIT PLANS

The Company sponsors a 401(k) plan (the Plan) which covers substantially all of
its employees meeting minimum age and service requirements. The Plan provides
for elective contributions by employees up to the lesser of 15% of the
employee's compensation or the maximum limit allowed by tax regulations. Under
the terms of the Plan, the Company makes matching contributions equal to 25% of
the first 6% of each employee's elective contributions to the Plan. In addition,
the Company may make discretionary contributions up to 15% of total participant
compensation. During the years ended April 30, 1994, 1995 and 1996, the Company
made contributions to the Plan of $20,965, $25,692 and $24,626, respectively,
and $10,250 and $17,137 for the six-month periods ended October 31, 1995 and
1996, respectively.

F-15

<PAGE>

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Notes To Consolidated Financial Statements
(Information Subsequent to April 30, 1996 is Unaudited)

NOTE 13 - INCENTIVE STOCK OPTION PLAN

The Company has a Stock Option Plan (the Option Plan) pursuant to which options
to purchase 200,000 shares of the Company's common stock may be granted to
officers and employees of the Company or its subsidiaries and to other persons.
As of October 31, 1996, no stock options had been granted pursuant to the Option
Plan.

Options granted pursuant to the Option Plan may be "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, or
"non-qualified stock options," which are options that do not meet the
requirements of Section 422. Incentive options may be granted only to key
employees of the Company, as defined in the Option Plan, and non-qualified
options may be granted to both key employees and other persons, other than an
employee of the Company, who are committed to the interests of the Company.

The Option Plan expires November 21, 2004, except as to options previously
granted and outstanding under the Option Plan at that time.

NOTE 14 - INVESTMENT IN JOINT VENTURE

The Company had an ownership interest of 13% in Saxon International Building
Systems (Saxon) a Polish limited liability company in which the three major
stockholders of the Company have a 26% ownership interest. The Company
recognized losses from Saxon, which was accounted for on the equity method of
accounting, of $36,666 for the year ended April 30, 1994. The Company's
investment in Saxon had been reduced to zero at April 30, 1994, and the Company
ceased recognizing its proportionate share of Saxon's losses. During 1995, the
Company ceased all funding of Saxon and sold its ownership interest in Saxon to
an unrelated third party. Management does not believe it has any contingent
liabilities arising from its prior ownership in Saxon.

NOTE 15 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of trade receivables, trade payables
and various notes payable to banks, a financing company and a supplier. The
Company believes the carrying value of these financial instruments approximate
their estimated fair value.

F-16

<PAGE>
AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Notes To Consolidated Financial Statements
(Information Subsequent to April 30, 1996 is Unaudited)

NOTE 16 - MAJOR CUSTOMERS

The following is a summary of customers accounting for ten percent (10%) or more
of the Company's revenues and trade accounts receivable for the periods
indicated:

Revenues
--------------------------------------------------------
Year Ended April 30, Six Months Ended October 31,
-------------------------- ----------------------------
1994 1995 1996 1995 1996
----- ----- ----- ----- -----

<S> <C> <C> <C> <C> <C>
Customer A ....... 19.0% 19.8% 26.0% 32.0% 18.0%
Customer B ....... 21.6 -- -- -- --
Customer C ....... -- 10.2 -- -- --
Customer D ....... -- -- -- -- --
Customer E ....... -- -- -- -- 18.0
------ ------ ------ ------ ------
40.6% 30.0% 26.0% 32.0% 36.0%
====== ====== ====== ====== ======

<CAPTION>
Receivables
----------------------------------------
April 30,
------------------------- October 31,
1994 1995 1996 1996
----- ----- ----- -----

<S> <C> <C> <C> <C>
Customer A ....... 11% 20% 11% 23%
Customer B ....... -- -- -- --
Customer C ....... -- -- -- --
Customer D ....... -- 13 -- --
Customer E ....... -- -- -- 24%
------ ------ ------ ------
11% 33% 11% 47%
====== ====== ====== ======

</TABLE>
NOTE 17 - INITIAL PUBLIC OFFERING

The Company is preparing to register the sale of 700,000 shares of common stock
and 700,000 warrants with the Securities and Exchange Commission as part of an
initial public offering. Each warrant is exercisable to purchase one share of
common stock at an exercise price of $5.00 per share. The Company has entered
into a letter of intent with an underwriter to offer such units in a public
offering on a "firm commitment basis". If the offering is consummated, the
underwriter will receive underwriters' warrants to purchase a total of 70,000
shares of common stock and 70,000 warrants, each at 120% of the initial offering
price for a period of four years beginning twelve months after the closing of
the offering. The Company has granted registration rights with respect to the
common stock and warrants underlying the underwriters' warrants.

F-17

<PAGE>

AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Notes To Consolidated Financial Statements
(Information Subsequent to April 30, 1996 is Unaudited)

NOTE 18 - PRIVATE PLACEMENT FINANCING

In July 1996, the Company issued an aggregate of 500,100 shares of Common Stock,
3,000,000 Warrants, and $300,000 aggregate face amount of unsecured promissory
notes, payable in a balloon payment plus accrued interest at 10 percent per
annum due on the earlier of April 24, 1997 or the closing of any public debt or
equity offering by the Company or the closing of any transaction in which the
Company's securities are exchanged for securities of a public entity. The
Company incurred a charge to earnings of approximately $1,005,000 upon the
issuance of 500,100 shares of common stock. An additional $100,000 of expense
was recognized during the six-month period ending October 31, 1996, which
represented the amortization of the discount on the promissory notes. The
discount on the promissory notes is being amortized on the interest method over
the term of the notes.

* * * * * *

F-18

<PAGE>

INDEPENDENT AUDITORS' REPORT
ON CONSOLIDATED FINANCIAL STATEMENT SCHEDULE

To the Stockholders
American International Consolidated Inc.
Houston, Texas

We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements of American International Consolidated Inc.
and Subsidiaries included in this Registration Statement and have issued our
report thereon dated July 1, 1996. Our audit was made for the purpose of forming
an opinion on the basic consolidated financial statements taken as a whole. The
accompanying financial statement schedule (Schedule II - Consolidated Valuation
and Qualifying Accounts) is the responsibility of the Company's management and
is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic consolidated financial
statements. This consolidated financial statement schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, is fairly stated in all material respects with
the financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.

/s/ HEIN + ASSOCIATES LLP

HEIN + ASSOCIATES LLP
Certified Public Accountants

Houston, Texas
July 1, 1996

S-1

<PAGE>
<TABLE>
<CAPTION>
AMERICAN INTERNATIONAL CONSOLIDATED INC.
AND SUBSIDIARIES

Schedule II - Consolidated Valuation and Qualifying Accounts

Balance at Charged to Balance
Beginning Costs and End of
Description of Year Expenses Write-Offs Year
- ------------------------------------ --------- ---------- ---------- --------
<S> <C> <C> <C> <C>
Year Ended April 30, 1994 allowance $ 50,000 $156,016 $ 99,422 $106,594
for doubtful accounting

Year Ended April 30, 1995 allowance $106,594 $ 47,919 $ 57,460 $ 97,053
for doubtful accounts

Year ended April 30, 1996 allowance $ 97,053 $ 61,504 $ 78,700 $ 79,857
for doubtful accounts

</TABLE>

S-2

<PAGE>

- -------------------------------------------

<S> <C>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFOR- MATION OR TO
MAKE ANY REPRESENTATION OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR AMERICAN INTERNATIONAL
MADE, SUCH INFORMATION OR REPRESENTATION MUST CONSOLIDATED INC.
NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED BY THE COMPANY. THIS PROSPEC- TUS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL
THERE BE ANY SALE OF THESE SECURITIES IN ANY
STATE IN WHICH SUCH OFFER, SOLICITATION OR
SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE. 700,000 Shares Of Common Stock
------------------------------ 700,000 Redeemable Common
Stock Purchase Warrants

TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY......................... 6
RISK FACTORS.............................. 9
USE OF PROCEEDS........................... 17
DIVIDEND POLICY............................19
DILUTION...................................20
BUSINESS.................................. 21
SELECTED CONSOLIDATED FINANCIAL DATA...... 31 ------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF PROSPECTUS
OPERATIONS............................... 33 ------------------------------
MANAGEMENT................................ 37
EXECUTIVE COMPENSATION.................... 39
PRINCIPAL STOCKHOLDERS.................... 42
TRANSACTIONS BETWEEN THE COMPANY AND
RELATED PARTIES.......................... 43
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE..................... 45
DESCRIPTION OF SECURITIES................. 46
UNDERWRITING.............................. 50 I.A. Rabinowitz & Co.
SECURITIES AND EXCHANGE COMMISSION
POSITION ON CERTAIN INDEMNIFICATION...... 53
LEGAL MATTERS............................. 53
EXPERTS................................... 53 ________________, 1996
CONCURRENT OFFERING........................53
ADDITIONAL INFORMATION.................... 54 -------------------------------------------
FINANCIAL INFORMATION..................... 55

</TABLE>

<PAGE>

[ALTERNATE PAGE FOR SELLING SECURITIES HOLDERS' PROSPECTUS]

[Logo red, white and blue flag] Subject To Completion

December 31, 1996

[Red Ink]
PROSPECTUS

AMERICAN INTERNATIONAL CONSOLIDATED INC.

500,100 Shares Of Common Stock And 3,000,000
Redeemable Common Stock Purchase Warrants

This Prospectus relates to 500,100 shares of Common Stock and 3,000,000
Redeemable Common Stock Purchase Warrants ("Warrants") of American International
Consolidated Inc. (the "Company"). See "OFFERING BY SELLING SECURITIES HOLDERS".
The Common Stock and Warrants being offered hereby were acquired by the persons
named herein (the "Selling Securities Holders") pursuant to a private offering
of Common Stock and Warrants (the "Private Placement") completed in July 1996.

The Company will receive no proceeds from the sales of the Common Stock and
Warrants by the Selling Securities Holders. The Common Stock and Warrants
offered by this Prospectus may be sold from time to time by the Selling
Securities Holders, or by transferees. No underwriting arrangements have been
entered into by the Selling Securities Holders. The distribution of the Common
Stock and Warrants by the Selling Warrant Holders may be offered in one or more
transactions that may take place on the over-the-counter market, including
ordinary broker's transactions, privately-negotiated transactions or through
sales to one or more dealers for resale of such Common Stock and Warrants as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, or at negotiated prices. Usual and customary
or specifically negotiated brokerage fees or commissions may be paid by the
Selling Securities Holders in connection with sales of the Warrants by Selling
Securities Holders. See "OFFERING BY SELLING SECURITIES HOLDERS".

ALT-COVER

<PAGE>

[ALTERNATE PAGE FOR SELLING SECURITIES HOLDERS' PROSPECTUS]

Common Stock and the Warrants and the initial exercise price and other terms of
the Warrants were established by negotiation between the Company and the
Underwriter and do not necessarily bear any direct relationship to the Company's
assets, earnings, book value per share or other generally accepted criteria of
value. See "UNDERWRITING". The Company intends to have the Common Stock and
Warrants quoted on the OTC Bulletin Board, an electronic quotation system
maintained by the National Association Of Securities Dealers, Inc. ("NASD"),
under the trading symbols "AICI" and "AICIW," respectively.

On _________ 1996, the Company completed an initial public offering of
700,000 shares of Common Stock and 700,000 Warrants through I. A. Rabinowitz &
Co. (the "Underwriter").

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSION NOR HAS
THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is December __, 1996

ALT-COVER

<PAGE>

[ALTERNATE PAGE FOR SELLING SECURITIES HOLDERS' PROSPECTUS]

PROSPECTUS SUMMARY

The Company

American International Consolidated Inc. (the "Company") is a manufacturer
and general contractor that focuses primarily on three types of construction
products: mini-warehouses and self-storage facilities; metal buildings and
structural steel projects; and cold storage, including refrigerated and freezer,
buildings. The Company's services range from the start, or construction design,
phase to the finish, or erection, phase of a project, including general
construction, construction management, design, manufacture, building, and
turnkey services. The Company selects, coordinates and manages subcontractors
for substantially all phases of the work, except for design, erection and
manufacture of certain metal building components. The Company also provides
oversight and supervision of the entire construction process for each project.
\
The Company intends to take advantage of its increased capital and improved
financial condition resulting from its Offering by (i) increasing business
volume through increasing bonding capacity in order to access larger projects
and other new business, undertaking planned domestic and international marketing
programs, and increasing business referrals from suppliers and other business
contacts, and (ii) increasing operating margins and profitability through
decreasing interest expense (from reduction of debt) and decreasing bonding
costs. See "BUSINESS--Business Plan And Strategy" for a more detailed
description of this strategy and each of these items. See also "USE OF
PROCEEDS".

The Company's principal executive and administrative offices are located at
14603 Chrisman, Houston, Texas 77039, telephone number (281) 449-9000.

The Company was incorporated under the laws of Texas in May 1985 and
changed its state of incorporation to Delaware in June 1994. In June 1996, the
Company changed its name to American International Consolidated Inc. from
American International Construction Inc.

The Offering
<TABLE>
<CAPTION>

<S> <C>
Securities Offered 500,100 shares of Common Stock and 3,000,000 Warrants to purchase
one share of Common Stock for $5.00 per share during the
five-year period beginning on the date of this Prospectus. The
Common Stock and Warrants offered by the Selling Securities
Holders, when purchased by buyers, are identical to the Common
Stock and Warrants offered by the Company pursuant to the
Offering Prospectus. See, "DESCRIPTION OF SECURITIES" and
"OFFERING BY SELLING SECURITIES HOLDERS".

Offering Price $ 5.00 per share of Common Stock
$ .10 per Warrant

ALT-5

<PAGE>

[ALTERNATE PAGE FOR SELLING SECURITIES HOLDERS' PROSPECTUS]

<S> <C>
Warrant Exercise Price $5.00 per share of Common Stock, subject to adjustments in
certain circumstances

Warrant Exercise Period The Period commencing on the date of this prospectus and expiring
on __________, 2001.

Shares of Common
Stock outstanding prior to
Offering: 2,900,100

Shares of Common Stock
offered (1): 700,000

Shares of Common Stock outstanding
after the Offering: 3,600,100

Warrants outstanding prior to
Offering: 3,000,000

Warrants offered: 700,000

Warrants outstanding after
the Offering: 3,700,000

Shares of Common Stock Outstanding
after the Offering assuming exercise of all
Warrants offered in Offering and previously
outstanding: 7,300,100
</TABLE>

- ---------------

(1) Does not include (i) up to 700,000 shares of common Stock issuable upon
exercise of the Warrants included in the Offering, (ii) up to 105,000
shares of Common stock included in the Underwriter's over-allotment
option, and (iii) up to 245,000 shares of Common Stock issuable upon
exercise of the Underwriter's Warrants and the warrants issuable to the
Underwriter upon the exercise of the Underwriter's Warrants and the
exercise of the Warrants issuable pursuant to the Underwriter's
over-allotment option. See "UNDERWRITING".

ALT-6

<PAGE>

[ALTERNATE PAGE FOR SELLING SECURITIES HOLDERS' PROSPECTUS]

<S> <C>
Redemption Of The Warrants The Warrants are redeemable by the Company at a price of
$.01 per Warrant upon 30 days prior written or published
notice at any time commencing 12 months after the date of
this Prospectus and prior to their exercise or expiration,
provided however, that the closing bid quotation for the
Common Stock for each of the 20 consecutive business days
ending on the third day prior to the Company's giving notice
of redemption has been at least 150 percent of the then
effective exercise price of the Warrants. The Warrants
remain exercisable during the 30- day notice period. Any
Warrantholder who does not exercise that holder's Warrants
prior to their expiration or redemption, as the case may be,
forfeits that holder's right to purchase the shares of
Common Stock underlying the Warrants. See "DESCRIPTION OF
SECURITIES--Common Stock Purchase Warrants--Redemption".

Use Of Proceeds The Company will not receive any of the proceeds from the
sales of the Common Stock and Warrants by the Selling
Securities Holders. In the event that any holder of Warrants
elects to exercise Warrants, the proceeds from the exercise
of the those Warrants will be utilized by the Company for
working capital purposes. See "USE OF PROCEEDS" and
"OFFERING BY SELLING SECURITIES HOLDERS".

Risk Factors The securities offered hereby involve a high degree of risk
and substantial immediate dilution to new investors. See
"CERTAIN RISK FACTORS" and "DILUTION".

OTC Bulletin Board Symbols Common Stock - AICI Warrants - AICIW

</TABLE>

ALT-7

<PAGE>

[ALTERNATE PAGE FOR SELLING SECURITIES HOLDERS' PROSPECTUS]

USE OF PROCEEDS

The Company will not receive any proceeds from the sale of the Selling
Securities Holders Common Stock and Warrants. In the event that any holder of
Warrants elects to exercise Warrants, the proceeds from the exercise of those
Warrants will be utilized by the Company for working capital purposes.

The net proceeds to the Company from the sale of Common Stock and Warrants
pursuant to the Offering Prospectus are estimated to be $2,988,000 after
deducting selling commissions and other unpaid expenses of the offering. Total
selling commissions equal to ten percent of the gross offering proceeds from the
Common Stock and Warrants, together with a three percent non-accountable expense
allowance, will be allowed to the Underwriter upon consummation of the offering.
Other expenses of the offering, estimated to be $495,000, include the
non-accountable expense allowance, printing costs, legal fees, accounting fees,
blue sky fees and costs, transfer agent fees, SEC and NASD filing fees and other
miscellaneous costs. Approximately $270,000 of the total offering expenses will
have been paid prior to closing by the Company, leaving $225,000 of offering
expenses and $357,000 of selling commissions to be paid from the offering
proceeds. The $2,988,000 of net proceeds are expected to be allocated
substantially as follows and applied in the following order of priority, during
the 12 month period following the offering(1):

Approximate
Approximate Percentage
Amount of Net Proceeds
----- ---------------

<S> <C> <C>
Domestic and International Marketing Program ......... $ 100,000 3.3%

Reduction of Secured Note to Major Supplier (2) ...... 1,200,000 40.2%

Repayment of Unsecured Notes (3) ..................... 300,000 10.0%

Upgrade Computer Software Systems .................... 50,000 1.7%

Reduction of Trade Accounts .......................... 800,000 26.8%

Other Working Capital (4) ............................ 538,000 18.0%
---------- -----

TOTAL NET PROCEEDS .......................... $2,988,000 100%
========== =====
- --------------------
</TABLE>

(1) See "BUSINESS--Business Plan And Strategy" for a description of how the
proposed allocation of proceeds of this Offering applies to the Company's
plans.

(2) The Company intends to reduce by $1.2 million the outstanding principal
balance on the outstanding note dated April 24, 1996, to its major

ALT-17

<PAGE>
[ALTERNATE PAGE FOR SELLING SECURITIES HOLDERS' PROSPECTUS]

supplier. When this occurs, that note, which accrues interest at one
percent over the Prime Rate (as designated in The Wall Street Journal) and
matures on April 30, 2001, will be adjusted to decrease the weekly payments
from $11,537 to approximately $5,100. See "BUSINESS--Indebtedness To Major
Supplier".

(3) The Company intends to repay the $300,000 of indebtedness that was incurred
in July 1996 in order to pay for costs of this Offering and to provide
immediate working capital. This indebtedness accrues interest at 10 percent
per annum and is due and payable upon the earliest to occur of January 24,
1997 or the closing of any public debt or equity financing of the Company
or the closing of any transaction in which the Company's securities are
exchanged for securities of another entity (whether by merger or
otherwise).

(4) The Company's working capital will be utilized for general corporate
purposes and operating expenses, including payment of $108,000 for the
Underwriter's consulting fee.

ALT-18

<PAGE>
[ALTERNATE PAGE FOR SELLING SECURITIES HOLDERS' PROSPECTUS]

SELLING SECURITIES HOLDERS

The Company is registering the sale of Common Stock and Warrants by persons
who received an aggregate of 500,100 shares of Common Stock and 3,000,000
Warrants (the "Selling Securities Holders") in the Private Placement pursuant to
exemptions from registration under federal and state securities laws. In
addition, the Company is registering the exercise of those Warrants by the
persons who purchase those Warrants from the Selling Securities Holders pursuant
to this Prospectus and, in the alternative, the sale of Common Stock received by
the Selling Securities Holders upon the exercise of the Warrants by the Selling
Securities Holders. The Selling Securities Holders may sell their Warrants or
Common Stock at such prices as they are able to obtain in the market, if any
market develops. The Company will receive no proceeds from the sale of Warrants
or Common Stock by the Selling Securities Holders. The following table sets
forth the name of each Selling Securities Holder, the number of Warrants
beneficially owned by each Selling Securities Holder before this Offering, the
number of Warrants proposed to be sold by each Selling Securities Holder, the
number of Warrants owned after this Offering assuming the sale of all the
Warrants offered by the Selling Securities Holders, the number of shares of
Common Stock owned by the Selling Securities Holders before the Offering, the
number of shares of Common Stock to be sold by the Selling Securities Holders
assuming they exercise their Warrants, and the number of shares owned by the
Selling Securities Holders after the Offering.

<TABLE>
<CAPTION>
Number Of Shares
Number of Number Of Of Common Stock Number of Number Of Shares
Warrants Owned Warrants to Be Warrants Owned Owned Before Shares To Be Owned After
Name Before Offering Sold After Offering Offering(1) Sold (2) Offering
- --------------------------- --------------- -------------- -------------- -------------- ------------- ----------------

<S> <C> <C> <C> <C> <C> <C>
Alina Garcia ................. 40,000 40,000 0 46,668 46,668 0
Scott Gerard ................. 250,000 250,000 0 291,675 291,675 0
Richard H. Eisen ............. 100,000 100,000 0 116,670 116,670 0
Rory Nichols ................. 250,000 250,000 0 291,675 291,675 0
Scott Stackman ............... 150,000 150,000 0 175,005 175,005 0
Scott Silverman .............. 250,000 250,000 0 291,675 291,675 0
Paul G. Leff ................. 250,000 250,000 0 291,675 291,675 0
Robert L. Dubofsky ........... 20,000 20,000 0 23,334 23,334 0
Pemvi, Inc. .................. 80,000 80,000 0 93,336 93,336 0
George Stritas ............... 10,000 10,000 0 11,667 11,667 0
Mogul Capital Corp. .......... 250,000 250,000 0 291,675 291,675 0
Euro Pharmaceuticals
Distributors Ltd. .......... 750,000 750,000 0 875,025 875,025 0
John Donnidio ................ 10,000 10,000 0 11,667 11,667 0
LTA Holding Corp. ............ 10,000 10,000 0 11,667 11,667 0
Frank Signorile .............. 10,000 10,000 0 11,667 11,667 0
Abe Heyman ................... 10,000 10,000 0 11,667 11,667 0
Maria Capello ................ 10,000 10,000 0 11,667 11,667 0
Geneva Partners .............. 10,000 10,000 0 11,667 11,667 0
Al Abramovitch ............... 10,000 10,000 0 11,667 11,667 0
Princess Export
Associates, Inc. ........... 50,000 50,000 0 58,335 58,335 0
E.P. Ong ..................... 10,000 10,000 0 11,667 11,667 0
Mordecai Goldzweig ........... 10,000 10,000 0 11,667 11,667 0
Irwin and Michelle Raymer .... 10,000 10,000 0 11,667 11,667 0
Tammy L. Gross ............... 60,000 60,000 0 70,002 70,002 0
Randy Bobkin ................. 190,000 190,000 0 221,673 221,673 0
Rifky Weiner ................. 200,000 200,000 0 233,340 233,340 0
--------- --------- --------- --------- --------- ---------
TOTAL .. 3,000,000 3,000,000 0 3,500,100 3,500,100 0

</TABLE>

ALT-50

<PAGE>

[ALTERNATE PAGE FOR SELLING SECURITIES HOLDERS' PROSPECTUS]

- ----------------------------

(1) Because the Warrants currently are exercisable, the shares issuable upon
the exercise of the Warrants are considered beneficially owned by the
Selling Securities Holders. The number of shares underlying the Warrants
shown for each Selling Securities Holder under "Number Of Warrants Before
Offering" are included in the "Number Of Share Of Common Stock Owned Before
Offering."

(2) The number of shares of Common Stock to be sold assumes that the Selling
Securities Holders exercise all their Warrants and elect to sell all the
shares of Common Stock received upon the exercise of the Warrants and all
the shares of Common Stock received in the Private Placement. Upon the
exercise of the Warrants by the Selling Securities Holders, they would
receive restricted shares of Common Stock pursuant to an exemption from
registration under Rule 506 under the Securities Act and those shares of
Common Stock could be transferred only pursuant to an effective
registration statement or an exemption from registration.

CONCURRENT OFFERING

The registration statement of which this Prospectus forms a part also
covers 700,000 shares of Common Stock and 700,000 Warrants being offered by the
Company in the Offering made pursuant to the Offering Prospectus.

ALT-51

<PAGE>

<S> <C>
- ------------------------------------------- AMERICAN INTERNATIONAL
CONSOLIDATED INC.
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFOR- MATION OR TO
MAKE ANY REPRESENTATION OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED BY THE COMPANY. THIS PROSPEC- TUS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL 500,100 Shares Of Common Stock
THERE BE ANY SALE OF THESE SECURITIES IN ANY 3,000,000 Redeemable Common
STATE IN WHICH SUCH OFFER, SOLICITATION OR Stock Purchase Warrants
SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION
OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.

------------------------------

TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY......................... 6 ------------------------------
RISK FACTORS.............................. 9
USE OF PROCEEDS........................... 17 PROSPECTUS
DIVIDEND POLICY............................19 ------------------------------
DILUTION...................................20
BUSINESS.................................. 21
SELECTED CONSOLIDATED FINANCIAL DATA...... 31
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.............................. 33
MANAGEMENT................................ 37
EXECUTIVE COMPENSATION.................... 39
PRINCIPAL STOCKHOLDERS.................... 42
TRANSACTIONS BETWEEN THE COMPANY AND
RELATED PARTIES.......................... 43
CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE..................... 45
DESCRIPTION OF SECURITIES................. 46
SELLING SECURITIES HOLDERS................50
CONCURRENT OFFERING.......................51
SECURITIES AND EXCHANGE COMMISSION ________________, 1996
POSITION ON CERTAIN INDEMNIFICATION..... 53
LEGAL MATTERS............................ 53 ---------------------------------------
EXPERTS.................................. 53
ADDITIONAL INFORMATION................... 54
FINANCIAL INFORMATION.................... 55
</TABLE>

ALT-BACK COVER

<PAGE>

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses Of Issuance And Distribution.

The following is an itemization of all expenses (subject to future
contingencies) incurred or to be incurred by the Registrant in connection with
the issuance and distribution of the securities being offered.

Registration and filing fee............................... $ 10,530
Transfer agent's fee*..................................... 3,000
Printing and engraving*................................... 22,000
Accounting fees and expenses*............................. 100,000
Legal fees and expenses*.................................. 175,000
Blue sky fees and expenses*............................... 50,000
NASD filing fee........................................... 3,224
Underwriter's non-accountable expense allowance........... 107,100
Standard & Poor's listing................................. 2,380
Miscellaneous*............................................ 21,766
-------
Total* $495,000
=======
- --------------------
* Estimated

Item 14. Indemnification Of Directors And Officers.

The Delaware General Corporation Law provides for indemnification by a
corporation of costs incurred by directors, employees, and agents in connection
with an action, suit, or proceeding brought by reason of their position as a
director, employee, or agent. The person being indemnified must have acted in
good faith and in a manner that the person reasonably believed to be in or not
opposed to the best interests of the corporation.

In addition to the general indemnification section, Delaware law provides
further protection for directors under Section 102(b)(7) of the General
Corporation Law of Delaware. This section was enacted in June 1986 and allows a
Delaware corporation to include in its Certificate Of Incorporation a provision
that eliminates and limits certain personal liability of a director for monetary
damages for certain breaches of the director's fiduciary duty of care, provided
that any such provision does not (in the words of the statute) do any of the
following:

"eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under
section 174 of this Title [dealing with willful or negligent violation
of the statutory provision concerning dividends, stock purchases and
redemptions], or (iv) for any transaction from which the director
derived an improper personal benefit. No such provision shall eliminate

- II-1 -

<PAGE>

or limit the liability of a director for any act or omission occurring
prior to the date when such provision becomes effective..."

The Board Of Directors is empowered to make other indemnification as
authorized by the Certificate Of Incorporation, Bylaws or corporate resolution
so long as the indemnification is consistent with the Delaware General
Corporation Law. Under the Company's Bylaws, the Company is required to
indemnify its directors to the full extent permitted by the Delaware General
Corporation Law, common law and any other statutory provisions.

Item 15. Recent Sales Of Unregistered Securities.

In July 1996, the Company sold an aggregate of 500,100 shares of Common
Stock, 3,000,000 Warrants, and $300,000 aggregate face amount of promissory
notes in reliance upon exemptions pursuant to Sections 4(2) and 4(6) of the
Securities Act of 1933, as amended. These securities were sold solely to
accredited investors in 300 units at a price of $1,000 per unit. Each unit
consisted of 1,667 shares of Common Stock, 10,000 Warrants, and one promissory
note in the face amount of $1,000.

Item 16. Exhibits.

The following is a complete list of Exhibits filed as part of this
Registration Statement, which Exhibits are incorporated herein.

Number Description

1.1 Underwriting Agreement between American International Consolidated
Inc. and I.A. Rabinowitz & Co.(6)

2.1 Agreement And Plan Of Merger of American International Construction,
Inc., a Texas Corporation, and American International Construction
Inc., a Delaware Corporation.(1)

2.2 Plan Of Merger of American International Construction, Inc. and AIC
Management, Inc.(1)

2.3 Plan Of Merger of American International Construction, Inc. and
American International Thermal Systems, Inc.(1)

2.4 Plan Of Merger of American International Construction, Inc. and
American International Building Systems, Inc.(1)

3.1(a) Certificate Of Incorporation filed with the Delaware Secretary Of
State on June 7, 1994.(1)

3.1(b) Certificate of Amendment To The Certificate of Incorporation filed
with the Delaware Secretary of Sate on July 26, 1996. (5)

- II-2 -

<PAGE>

3.2 Bylaws.(1)

4.1(a) Specimen Common Stock Certificate.(1)

4.1(b) Specimen Common Stock Purchase Warrant. (5)

4.2 Form of Underwriter's Warrant (5)

4.3 Form of Warrant Agreement concerning Common Stock Purchase Warrants.
(5)

5.1 Opinion of Bearman Talesnick & Clowdus Professional Corporation
concerning legality of issuance of Common Stock, Warrants, and
underlying securities. (5)

10.1A Loan Agreement effective April 24, 1996 between and among the
Company, Metal Building Components, Inc. ("MBCI"), Danny Roy Clemons,
Ralph Leroy Farrar, Judith Ann Farrar, Jimmy Wayne Williams, Shirley
Beth Williams, and John Thomas Wilson. (5)

10.1B Letter Agreement dated October 8, 1996 modifying Loan Agreement dated
April 24, 1996.(5)

10.1C Letter Agreement dated December 31, 1996 modifying Loan Agreement
dated April 24, 1996.

10.2 Renewal, Extension And Modification Agreement effective as of
September 3, 1993 between American International Construction, Inc.
and Texas Commerce Bank National Association.(1)

10.3 Renewal, Extension And Modification Agreement effective as of
September 5, 1993 between American International Construction, Inc.
and Texas Commerce Bank National Association.(1)

10.4A Renewal, Extension And Modification Agreement effective as of March
5, 1995 between American International Construction, Inc. and Texas
Commerce Bank National Association.(4)

10.4B Renewal, Extension And Modification Agreement effective as of March
5, 1995 between American International Construction, Inc. and Texas
Commerce Bank National Association.(4)

10.5 Employee Stock Option Plan.(1)

10.8 Revised Form of Executive Service Agreement between the Company and
each of John T. Wilson, Danny R. Clemons, Ralph L. Farrar and Jim W.
Williams.(3)

- II-3 -

<PAGE>

10.8A Schedule Identifying Material Differences Among Executive Service
Agreements between the Company and each of John T. Wilson, Danny R.
Clemons, Ralph L. Farrar and Jim W. Williams.(1)

10.9 Executive Service Agreement between the Company and Jimmy M. Rogers
dated November 16, 1994.(1)

10.10 Agreement dated May 23, 1996 between the Company and U.S.
Storage\Westheimer, Ltd. concerning site preparation for the U.S.
Storage mini-warehouse facilities in Houston, Texas.

10.11 Agreement dated May 23, 1996 between the Company and U.S.
Storage\Westheimer, Ltd. concerning the construction of the U.S.
Storage mini-warehouse facilities in Houston, Texas.

10.12 Form of Conveyance, Transfer And Assignment Of Corporate Stock
Separate From A Certificate executed by each of Messrs. Clemons,
Farrar and Wilson transferring their respective interests in the U.S.
Storage, Inc. and U.S. Storage Management Services, Inc. to the
Company.(5)

16 Letter to Securities and Exchange Commission from the Company's former
independent accountant, MELTON & MELTON, L.L.P.(2)

22 List of subsidiaries of Registrant. (1)

24.1 Consent of Bearman Talesnick & Clowdus Professional Corporation
(included in Opinion in Exhibit 5.1).

24.2 Consent of HEIN + ASSOCIATES LLP.

25 Power of Attorney (5)
- ---------------------

(1) Incorporated by reference from the Company's Registration Statement on Form
S-1 filed with the Securities And Exchange Commission ("SEC") on December 12,
1994, File No. 33-87336.

(2) Incorporated by reference from the Company's Amendment No. 1 to Registration
Statement on Form S-1 filed with the SEC on January 24, 1995, File No. 33-87336.

(3) Incorporated by reference from the Company's Amendment No. 2 to Registration
Statement on Form S-1 filed with the SEC on February 15, 1995, File No.
33-87336.

(4) Incorporated by reference from the Company's Amendment No. 3 to Registration
Statement on Form S-1 filed with the SEC on March 16, 1995, File No. 33-87336.

(5) Previously filed.

(6) Amended Underwriting Agreement to be filed by amendment.

- II-4 -

<PAGE>

Item 17. Undertakings.

1. The Company hereby undertakes:

(a) to file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement:

(1) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(2) to reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and

(3) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.

(b) That for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof;

(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.

2. The Company hereby undertakes to provide to the Underwriter at the closing
specified in the Underwriting Agreement certificates in such denominations
and registered in such names as required by the Underwriter to permit
prompt delivery to each purchaser.

3. Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities And Exchange Commission, such
indemnification is against public policy as expressed in the 1933 Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or a controlling person of the
Company in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or a controlling person in connection
with the securities being registered, the Company will, unless in the
opinion of its counsel, the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the 1933 Act and will be governed by the final adjudication of such issue.

- II-5 -

<PAGE>

4. The Company hereby undertakes that:

(a) for purposes of determining any liability under the 1933 Act, the
information omitted from the form of prospectus filed as part of the
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the 1933 Act shall be deemed to be part of the Registration Statement
as of the time it was declared effective.

(b) for the purpose of determining any liability under the 1933 Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.

- II-6 -

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Company has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on December 30, 1996.

AMERICAN INTERNATIONAL CONSOLIDATED INC.

By: /s/ John T. Wilson
------------------------------------
John T. Wilson, Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following ersons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>

Signatures Title Date
- ---------- ----- ----

/s/ John T. Wilson Chief Executive Officer and December 30, 1996
- ----------------------------------------- Director
John T. Wilson

/s/ Danny R. Clemons
- ----------------------------------------- President/Mini-Warehouse December 30, 1996
Danny R. Clemons Division
and Director

/s/ Ralph L. Farrar
- ----------------------------------------- President/Metal Buildings December 30, 1996
Ralph L. Farrar Division, Secretary and Director

/s/ Jim W. Williams
- ----------------------------------------- Chief Financial Officer, Vice December 30, 1996
Jim W. Williams President/Finance, Principal
Financial Officer, Principal
Accounting Officer, and
Assistant Secretary

</TABLE>

- II-7 -

<PAGE>
EXHIBIT INDEX

(Attached To And Made A Part Of Amendment No. 2
To The Registration Statement On Form S-1
For American International Consolidated Inc. Dated December 31, 1996)

The following is a complete list of Exhibits filed as part of this Registration
Statement:

Number Description

1.1 Underwriting Agreement between American International
Consolidated Inc. and I.A. Rabinowitz & Co.(6)

2.1 Agreement And Plan Of Merger of American International
Construction, Inc., a Texas Corporation, and American
International Construction Inc., a Delaware Corporation.(1)

2.2 Plan Of Merger of American International Construction, Inc. and
AIC Management, Inc.(1)

2.3 Plan Of Merger of American International Construction, Inc. and
American International Thermal Systems, Inc.(1)

2 4 Plan Of Merger of American International Construction, Inc. and
American International Building Systems, Inc.(1)

3.1(a) Certificate Of Incorporation filed with the Delaware Secretary
Of State on June 7, 1994.(1)

3.1(b) Certificate of Amendment To The Certificate of Incorporation
filed with the Delaware Secretary of Sate on July 26, 1996. (5)

3.2 Bylaws.(1)

4.1(a) Specimen Common Stock Certificate.(1)

4.1(b) Specimen Common Stock Purchase Warrant. (5)

4.2 Form of Underwriter's Warrant (5)

4.3 Form of Warrant Agreement concerning Common Stock Purchase
Warrants. (5)

5.1 Opinion of Bearman Talesnick & Clowdus Professional Corporation
concerning legality of issuance of Common Stock, Warrants, and
underlying securities. (5)

10.1A Loan Agreement effective April 24, 1996 between and among the
Company, Metal Building Components, Inc. ("MBCI"), Danny Roy
Clemons, Ralph Leroy Farrar, Judith Ann Farrar, Jimmy Wayne
Williams, Shirley Beth Williams, and John Thomas Wilson. (5)

10.1B Letter Agreement dated October 8, 1996 modifying Loan Agreement
dated April 24, 1996.(5)

10.1C Letter Agreement dated December 31, 1996 modifying Loan
Agreement dated April 24, 1996.

10.2 Renewal, Extension And Modification Agreement effective as of
September 3, 1993 between American International Construction,
Inc. and Texas Commerce Bank National Association.(1)

10.3 Renewal, Extension And Modification Agreement effective as of
September 5, 1993 between American International Construction,
Inc. and Texas Commerce Bank National Association.(1)

<PAGE>

10.4A Renewal, Extension And Modification Agreement effective as of
March 5, 1995 between American International Construction, Inc.
and Texas Commerce Bank National Association.(4)

10.4B Renewal, Extension And Modification Agreement effective as of
March 5, 1995 between American International Construction, Inc.
and Texas Commerce Bank National Association.(4)

10.5 Employee Stock Option Plan.(1)

10.8 Revised Form of Executive Service Agreement between the Company
and each of John T. Wilson, Danny R. Clemons, Ralph L. Farrar and
Jim W. Williams.(3)

10.8A Schedule Identifying Material Differences Among Executive
Service Agreements between the Company and each of John T.
Wilson, Danny R. Clemons, Ralph L. Farrar and Jim W. Williams.(1)

10.9 Executive Service Agreement between the Company and Jimmy M.
Rogers dated November 16, 1994.(1)

10.10 Agreement dated May 23, 1996 between the Company and U.S.
Storage\Westheimer, Ltd. concerning site preparation for the U.S.
Storage mini-warehouse facilities in Houston, Texas.

10.11 Agreement dated May 23, 1996 between the Company and U.S.
Storage\Westheimer, Ltd. concerning the construction of the U.S.
Storage mini-warehouse facilities in Houston, Texas.

10.12 Form of Conveyance, Transfer And Assignment Of Corporate Stock
Separate From A Certificate executed by each of Messrs. Clemons,
Farrar and Wilson transferring their respective interests in the
U.S. Storage, Inc. and U.S. Storage Management Services, Inc. to
the Company.(5)

16 Letter to Securities and Exchange Commission from the Company's
former independent accountant, MELTON & MELTON, L.L.P.(2)

22 List of subsidiaries of Registrant. (1)

24.1 Consent of Bearman Talesnick & Clowdus Professional Corporation
(included in Opinion in Exhibit 5.1).

24.2 Consent of HEIN + ASSOCIATES LLP.

25 Power of Attorney (5)
- ---------------------

(1) Incorporated by reference from the Company's Registration Statement on Form
S-1 filed with the Securities And Exchange Commission ("SEC") on December 12,
1994, File No. 33-87336.

(2) Incorporated by reference from the Company's Amendment No. 1 to Registration
Statement on Form S-1 filed with the SEC on January 24, 1995, File No. 33-87336.

(3) Incorporated by reference from the Company's Amendment No. 2 to Registration
Statement on Form S-1 filed with the SEC on February 15, 1995, File No.
33-87336.

(4) Incorporated by reference from the Company's Amendment No. 3 to Registration
Statement on Form S-1 filed with the SEC on March 16, 1995, File No. 33-87336.

(5) Previously filed.

(6) Amended Underwriting Agreement to be filed by amendment.

American International Construction Inc.
A Division of American International Consolidated Inc.
14603 Chrisman
Houston, Texas 77039
(281) 449-9000 o FAX (281) 442-6351

December 31, 1996

Mr. Ken Maddox
M.B.C.I.
14031 West Hardy
Houston, Texas 77238

Re: Loan Agreement - April 24, 1996

Dear Ken:

During the process of refiling our Registration Statement with the S.E.C.,
and the review by our accountants Hein and Associates, it has been noted that we
need to update your consent relative to the following Negative Covenants in our
loan agreement with your company:

(A) For the fiscal year ended 4/30/96 we exceeded $120,000 aggregate limit
on capital expenditures by acquiring $148,264 in fixed assets. I believe this
limit would not be applicable until the fiscal year beginning May 1, 1996 since
we executed the loan agreement on April 24, 1996. Your confirmation concerning
the effective date of this covenant is requested.

I. M.B.C.I. hereby acknowledges that this covenant is effective for the
fiscal year beginning May 1, 1996 and consents to the capital expenditures
incurred for the fiscal year ended 4/30/96.

/s/ Ken Maddox, M.B.C.I. Vice President/CFO
------------------------------------------
Signature

(B) During the current fiscal year we have acquired a "Metal Muncher" or
Hydraulic Gap-Bed Punch Press which costs $32,500. I have previously advised you
of this purchase and agreed to provide you the following explanation to justify
this acquisition.

This machine is utilized to punch bolt holes into plate steel. We presently are
fabricating a project which has approximately 18,000 holes. This project will
complete shipment in late November. Without this piece of equipment our options
are to hand-drill them at a cost of approximately $3.00 per hole or subcontract
them at a cost of $1.00 per hole. The anticipated payback due to this large
project is estimated to be 12 months. Excluding the large project indicated
above, we would normally recover our costs for this equipment in approximately
24 months.

<PAGE>

I have arranged to lease/finance this equipment through Glesby/Marks
Leasing for 36 months at approximately $1,100 per month. A copy of the Lease
Agreement and the invoice for the equipment is enclosed for your verification.
Your consent concerning this single capital expenditure in excess of $25,000 is
requested.

II. M.B.C.I. hereby acknowledges and consents to the "Metal Muncher"
acquired for a cost of $32,500 and lease financed by Glesby Marks as indicated
above.

/s/ Ken Maddox, M.B.C.I. Vice President/CFO
------------------------------------------
Signature

(C) During the current fiscal year ended April 1997 we have acquired
$125,262 in fixed assets or capital expenditures. Except for capital
expenditures from net proceeds of the public offering, we anticipate spending
less than $5,000 during the remaining fiscal year for capital expenditures.

III. M.B.C.I. hereby acknowledges and consents to up to $11,000 in capital
expenditures in excess of $120,000.

/s/ Ken Maddox, M.B.C.I. Vice President/CFO
------------------------------------------
Signature

(D) In paragraph 5.1(C) it is provided that A.I.C.I. may incur (up to
$300,000 - exclusive of broker's commission) in pursuit of said public offering.
I have enclosed a schedule detailing all the costs incurred since inception,
amounts expensed and amounts capitalized. Please note I have included the costs
and proceeds from the "Bridge Loan" which was consummated in July. It is
anticipated that the Company will incur approximately $50,000 of additional
costs prior to the effective date of the Initial Public Offering. Please confirm
if we are in compliance with the limit specified in this covenant.

IV. M.B.C.I. hereby acknowledges and consents to the costs incurred to date
pursuing the Initial Public Offering of its stock and the anticipated future
costs of $50,000. We confirm the Company is in compliance with this covenant as
a result of off-setting the proceeds of the $300,000 "Bridge Loan".

/s/ Ken Maddox, M.B.C.I. Vice President/CFO
------------------------------------------
Signature

(E) The present status of the I.P.O. is that we plan to file our responses
to the S.E.C. by December 30, 1996. We anticipate that we will clear all their
comments, obtain their final approval, and "go effective" by February 25, 1997.

As a result of these delays we request a reasonable extension of the
October 31, 1996 deadline specified in the Loan Documents Covenants.

<PAGE>

V. M.B.C.I. hereby acknowledges and agrees to extend the Initial Public
Offering deadline to April 30, 1997.

/s/ Ken Maddox, M.B.C.I. Vice President/CFO
-------------------------------------------
Signature

(F) During the present fiscal year we have experienced two material adverse
changes which require disclosure:

(1) Chatham Self Storage Project, Chatham, New Jersey. We recently
settled a dispute on the above referenced project whereby we have
to write-off approximately $200,000 of previously recognized
(fiscal 95-96) profit;

(2) The Building Systems Division recognized a loss of approximately
$450,000 in gross margins as a result of sales estimating and
management procedures.

VI. M.B.C.I. hereby acknowledges and consents to the material adverse
changes.

/s/ Ken Maddox, M.B.C.I. Vice President/CFO
-------------------------------------------
Signature

(G) AICI has acquired a 37% interest in a Limited Liability Company. This
Limited Liability Company is a general partner (45% ownership) in a Limited
Partnership that owns a mini-storage project (U.S. Storage/Westheimer). The
Company also secured the construction contract for the related mini-storage
project for approximately $1.4 million.

VII. M.B.C.I. hereby acknowledges and consents to this investment in Third
Parties.

/s/ Ken Maddox, M.B.C.I. Vice President/CFO
-------------------------------------------
Signature

(H) AICI has presently contracted to construct another mini-warehouse
project for approximately $1.5 million (U.S. Storage/Woodlands), and will
acquire approximately 24.5% in a Limited Liability Company that owns 45%
ownership in a Limited Partnership that owns the project.

VIII. M.B.C.I. hereby acknowledges and consents to this investment in Third
Parties.

/s/ Ken Maddox, M.B.C.I. Vice President/CFO
-------------------------------------------
Signature

(I) AICI is currently delinquent in the timely payment of its accounts
payable with MBCI and it is estimated the amount past due (over 45 days old)
will be approximately $850,000.00 at December 31, 1996.

<PAGE>

IX. M.B.C.I. hereby acknowledges and consents to this past due amount at
December 31, 1996.

/s/ Ken Maddox, M.B.C.I. Vice President/CFO
-------------------------------------------
Signature

(J) AICI has allowed the Life Insurance on its key executives to lapse due
to non-payment. However, we have now paid the premiums and are awaiting
notification of reinstatement.

X. M.B.C.I. hereby acknowledges and consents to this lapsed coverage.

/s/ Ken Maddox, M.B.C.I. Vice President/CFO
-------------------------------------------
Signature

(K) AICI anticipates that it will not reach its Gross Profit Covenant
requirement of 1.5% of gross revenues based on the losses sustained in the first
eight months of the current fiscal year.

XI. M.B.C.I. hereby acknowledges, consents and waives the required gross
profit covenant for the period 5/1/96 up to and including 12/31/96.

/s/ Ken Maddox, M.B.C.I. Vice President/CFO
-------------------------------------------
Signature

Your prompt response to the items addressed in this letter is requested so
Hein and Associates can resolve the S.E.C.'s comments. Please feel free to
contact John Wilson, Bill Betzler or me if you need any further information.

Sincerely,

/s/ Jim Williams

Jim Williams
VP - Finance

Enclosures

cc: John Wilson
Bill Betzler
JW/ad
<PAGE>

STATE OF TEXAS
COUNTY OF HARRIS

SWORN TO AND SUBSCRIBED by the said before
--------------------------------
and undersigned, a Notary Public in and for the County and State aforesaid this

day of , 19 .
- ---- ------- ---

My Commission Expires

- ----------------------------
---------------------------------
Notary Public

EXHIBIT 10.10

T H E A M E R I C A N I N S T I T U T E O F A R C H I T E C T S

AIA DOCUMENT A101

STANDARD FORM OF AGREEMENT BETWEEN
OWNER AND CONTRACTOR

where the basis of payment is a
STIPULATED SUM

1987 EDITION

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.

The 1987 Edition of AIA Document A201, General Conditions of the Contract for
Construction, is adopted in this document by reference. Do not use with other
general conditions unless this document is modified. This document has been
approved and endorsed by The Associated General Contractors of America.
- --------------------------------------------------------------------------------

AGREEMENT

made as of the 23rd day of May in the year of Nineteen Hundred and Ninety-Six

BETWEEN the Owner: U.S. Storage/Westheimer, Ltd.
(Name and Address) 610 West Greens Road
Houston, Texas

and the Contractor: American International Construction, Inc.
(Name and Address) 14603 Chrisman
Houston, Texas 77039

The Project is: U.S. Storage Mini-Warehouse Facilities
(Name and Address) 12711 Westheimer
Houston, Texas

The Architect is: Sikes Group, Inc.
(Name and Address) 1716 Magnum
---- Houston, Texas 77092
All referenceing to the Architect herein shall mean Sikes Group, Inc. The plans
and specifications for the pro ject have been prepared by the Contractor who
shall have full responsibility therefor. Owner shall have no lia bility for any
defects in the plans or specifications.
- --------------------------------------------------------------------------------
Copyright 1915, 1918, 1925, 1937, 1951, 1961, 1963, 1967, 1974, 1977, 1987 by
The American Institute of Architects, 1735 New York Avenue, N.W., Washington,
D.C. 20006. Reproduction of the material herein or substantial quotation of its
provisions without written permission of the AIA violates the copyright laws of
the United States and will be subject to legal prosecution.
- --------------------------------------------------------------------------------

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.
<PAGE>
2

ARTICLE 1
THE CONTRACT DOCUMENTS

The Contract Documents consist of this Agreement, Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications, addenda
issued prior to execution of this Agreement, other docu ments listed in this
Agreement and Modifications issued after execution of this Agreement; these form
the Con tract, and are as fully a part of the Contract as if attached to this
Agreement or repeated herein. The Contract represents the entire and integrated
agreement between the parties hereto and supersedes prior negotiations, repre-
sentations or agreement, either written or oral. An enumeration of the Contract
Documents, other than Modifications, appears in Article 9.

ARTICLE 2
THE WORK OF THIS CONTRACT

The Contractor shall execute the entire Work described in the Contract
Documents, except to the extent specifically indicated in the Contract Documents
to be the responsibility of others, or as follows:

The Contractor shall provide or procure all labor, equipment and material
necessary for the construction and installation of a public self storage
facility. Unless specified in writing to the contrary, the scope of work to be
performed is as outlined in Appendix 'A', attached hereto and made a part
hereof.

ARTICLE 3
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION

3.1 The date of commencement is the date from which the Contract Time of
Paragraph 3.2 is measured, and shall be the date of this Agreement, as first
written above, unless a different date is stated below or provision is made for
the date to be fixed in a notice to proceed issued by the Owner.

(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice to proceed.)

Unless the date of commencement is established by a notice to proceed issued by
the Owner, the Contractor shall notify the Owner in writing not less than five
days before commencing the Work to permit the timely filing of mortgages,
mechanic's liens and other security interests.

3.2 The Contractor shall achieve Substantial Completion of the entire Work not
later than: 45 Days

(Insert the calendar date or number of calendar days after the date of
commencement. Also insert any requirements for earlier Substantial Completion of
certain portions of the Work, if not stated elsewhere in the Contract
Documents.), subject to adjustments of this Contract Time as provided in the
Contract Documents.

(Insert provisions, if any, for liquidated damages relating to failure to
complete on time.)

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.
<PAGE>
3

ARTICLE 4
CONTRACT SUM

4.1 The Owner shall pay the Contractor in current funds for the Contractor's
performance of the Contract the Contract Sum of Thirty Thousand Dollars
($30,000.00), subject to additions and deductions as provided in the Contract
Documents.

4.2 The Contract Sum is based upon the following alternates, if any, which are
described in the Contract Documents and are hereby accepted by the Owner: Not
Applicable

(State the numbers or other identification of accepted alternates. If decisions
on other alternates are to be made by the Owner subsequent to the execution of
this Agreement, attach a schedule of such other alternates showing the amount
for each and the date until which that amount is valid.)

ARTICLE 5
PROGRESS PAYMENTS

5.1 Based upon Applications for Payment submitted to the Architect by the
Contractor and Certificates for Payment issued by the Architect, the Owner shall
make progress payments on account of the Contract Sum to the Contractor as
provided below and elsewhere in the Contract Documents.

5.2 The period covered by each Application for Payment shall be one calendar
month ending on the last day of the month, or as follows:
Contractor shall submit its draw request to the Owner and
Sikes Group, Inc., on or before the first day of the month for
the period ending on the 25th of the previous month.

5.3 Provided an Application for Payment is received by the Architect not later
than the 1st day of a month, the Owner shall make payment to the Contractor not
later than the 15th day such month for the period ending on the 25th of the
proceeding month. If an Application for Payment is received by the Architect
after the application date fixed above, payment shall be made by the Owner not
later than 10 days after the Architect receives the Application for Payment.

5.4 Each Application for Payment shall be based upon the schedule of values
submitted by the Contractor in accordance with the Contract Documents. The
schedule of values shall allocate the entire Contract Sum among the various
portions of the Work and be prepared in such form and supported by such data to
substantiate its accuracy as the Architect may require. This schedule, unless
objected to by the Architect, shall be used as a basis for reviewing the
Contractor's Applications for Payment.

5.5 Applications for Payment shall indicate the percentage of completion of each
portion of the Work as of the end of the period covered by the Application for
Payment.

5.6 Subject to the provisions of the Contract Documents, the amount of each
progress payment shall be computed as follows:

5.6.1 Take that portion of the Contract Sum properly allocable to completed Work
as determined by multiplying the percentage completion of each portion of the
Work by the share of the total Contract Sum allocated to that portion of the
Work in the schedule of values, less retainage of ten percent ( 10 %). Pending
final determination of cost to the Owner of changes in the Work, amounts not in

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.
<PAGE>
4

the dispute may be included as provided in Subparagraph 7.3.7 of the General
Conditions even though the Contract Sum has not yet been adjusted by Change
Order;

5.6.2 Add that portion of the Contract Sum properly allocable to materials and
equipment delivered and suitably stored at the site for subsequent incorporation
in the completed construction (or, if approved in advance by the Owner, suitably
stored off the site at a location agreed upon in writing), less retainage of ten
percent ( - 10 - %); 5.6.3 Subtract the aggregate of previous payments made by
the Owner; and

5.6.4 Subtract amounts, if any, for which the Architect has withheld or
nullified a Certificate for Payment as provided in Paragraph 9.5 of the General
Conditions.

5.7 The progress payment amount determined in accordance with Paragraph 5.6
shall be further modified under the following circumstances:

5.7.1 Add, upon Substantial Completion of the Work, a sum sufficient to increase
the total payments to ninty percent ( 90 %) of the Contract Sum, less such
amounts as the Architect shall determine for incomplete Work and unsettled
claims; and

5.7.2 Add, if final completion of the Work is thereafter materially delayed
through no fault of the Contractor, any additional amounts payable in accordance
with Subparagraph 9.10.3 of the General Conditions.

5.8 Reduction or limitation of retainage, if any, shall be as follows:
(If it is intended, prior to Substantial Completion of the entire Work, to
reduce or limit the retainage resulting from the percentages inserted in
Subparagraphs 5.6.1 and 5.6.2 above, and this is not explained elsewhere in the
Contract Documents, insert here provisions for such reduction or limitation.)

ARTICLE 6
FINAL PAYMENT

Final payment, constituting the entire unpaid balance of the Contract Sum, shall
be made by the Owner to the Contractor when (1) the Contract has been fully
performed by the Contractor except for the Contractor's responsibility to
correct nonconforming Work as provided in Subparagraph 12.2.2 of the General
Conditions and to satisfy other requirements, if any, which necessarily survive
final payment; and (2) a final Certificate for Payment has been issued by the
Architect; such final payment shall be made by the Owner not more than 30 days
after the issuance of the Architect's final Certificate for Payment, or as
follows:

ARTICLE 7
MISCELLANEOUS PROVISIONS

7.1 Where reference is made in this Agreement to a provision of the General
Conditions or another Contract Document, the reference refers to that provision
as amended or supplemented by other provisions of the Contract Documents.

7.2 Payments due and unpaid under the Contract shall bear interest from the date
payment is due at the rate stated below, or in the absence thereof, at the legal
rate prevailing from time to time at the place where the Project is located.

(Insert rate of interest agreed upon, if any.) 8% per annum.

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.
<PAGE>
5

(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner's and
Contractor's principal places of business, the location of the Project and
elsewhere may affect the validity of this provision. Legal advice should be
obtained with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)

7.3 Other provisions:

(a) The contractor, and not the owner, shall purchase and maintain
property insurance as specified in paragraph 11.3 of the General
Conditions.

ARTICLE 8
TERMINATION OR SUSPENSION

8.1 The Contract may be terminated by the Owner or the Contractor as provided in
Article 14 of the General Conditions.

8.2 The Work may be suspended by the Owner as provided in Article 14 of the
General Conditions.

ARTICLE 9
ENUMERATION OF CONTRACT DOCUMENTS

9.1 The Contract Documents, except for Modifications issued after execution of
this Agreement, are enumerated as follows:

9.1.1 The Agreement is this executed Standard Form of Agreement Between Owner
and Contractor, AIA Document A101, 1987 Edition.

9.1.2 The General Conditions are the General Conditions of the Contract for
Construction, AIA Document A201, 1987 Edition.

Document Title Pages
Appendix 'A' AICI Proposal Dated May 7, 1996 5
* In the event of a confllict between the AICI Proposal and the other contract
documents, the other contract documents shall control.
9.1.4 The Specifications are those contained in the Project Manual dated as in
Subparagraph 9.1.3, and are as follows:
(Either list the Specifications here or refer to an exhibit attached to this
Agreement)

Section Title Pages
See Appendix "A"

9.1.5 The Drawings are as follows, and are dated ______________________ unless a
different date is shown below:
(Either list the Drawings here or refer to an exhibit attached to this
Agreement.)

Number Title Date
See Appendix "A"

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.
<PAGE>
6

9.1.6 The addenda, if any, are as follows:

Number Title Pages

Portions of Addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in this
Article 9. 9.1.7 Other documents, if any, forming part of the Contract Documents
are as follows:
(List here any additional documents which are intended to form part of the
Contract Documents. The General Conditions provide that bidding requirements
such as advertisement or invitation to bid, Instructions to Bidders, sample
forms and the Contractor's bid are not part of the Contract Documents unless
enumerated in this Agreement. They should be listed here only if intended to be
part of the Contract Documents.)

This Agreement is entered into as of the day and year first written above and is
executed in at least three original copies of which one is to be delivered to
the Contractor, one to the Architect for use in the administration of the
Contract, and the remainder to the Owner.

OWNER CONTRACTOR
U.S. STORAGE/WESTHEIMER, LTD.
BY: U.S. STORAGE/WESTHEIMER, LTD. G.P., L.C.,
GENERAL PARTNER

BY: RAYMOND R. BETZ - MANAGER

/s/ Raymond R. Betz /s/ John T. Wilson
- ----------------------------------------- --------------------------------
(Signature) (Signature)

John T. Wilson
- ----------------------------------------- --------------------------------
(Printed name and title) (Printed name and title)

May 23, 1996 May 28, 1996
(Date) (Date)

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.

EXHIBIT 10.11

T H E A M E R I C A N I N S T I T U T E O F A R C H I T E C T S

AIA DOCUMENT A101

STANDARD FORM OF AGREEMENT BETWEEN
OWNER AND CONTRACTOR

where the basis of payment is a
STIPULATED SUM

1987 EDITION

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.

AGREEMENT

made as of the 23rd day of May in the year of Nineteen Hundred and Ninety-Six

BETWEEN the Owner: U.S. Storage/Westheimer, Ltd.
(Name and Address) 610 West Greens Road
Houston, Texas

and the Contractor: American International Construction, Inc.
(Name and Address) 14603 Chrisman
Houston, Texas 77039

The Project is: U.S. Storage Mini-Warehouse Facilities
(Name and Address) 12711 Westheimer
Houston, Texas

The Architect is: Sikes Group, Inc.
(Name and Address) 1716 Magnum
---- Houston, Texas 77092

All referencing to the Architect herein shall mean Sikes Group, Inc. The plans
and specifications for the project have been prepared by the Contractor who
shall have full responsibility therefor. Owner shall have no liability for any
defects in the plans or specifications. Contractor Warrants and represents that
in preparing the drawings and specifications for the Work, Contractor exercised
a degree of care in accordance with the professional stan dards prevailing among
architects in Houston, Texas, skilled in design for projects of similar nature
and scope. Contractor further warrants and represents that the drawings and
specifications for the Work are complete, accu rate and sufficient for the
purpose in view. Any changes in the Work necessitated by any errors, omissions
or ambiguities in the drawings or specifications shall be performed at
Contractor's sole expense."
- --------------------------------------------------------------------------------
Copyright 1915, 1918, 1925, 1937, 1951, 1961, 1963, 1967, 1974, 1977, 1987 by
The American Institute of Architects, 1735 New York Avenue, N.W., Washington,

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.
<PAGE>
2

D.C. 20006. Reproduction of the material herein or substantial quotation of its
provisions without written permission of the AIA violates the copyright laws of
the United States and will be subject to legal prosecution.
- --------------------------------------------------------------------------------

ARTICLE 1
THE CONTRACT DOCUMENTS

The Contract Documents consist of this Agreement, Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications, addenda
issued prior to execution of this Agreement, other documents listed in this
Agreement and Modifications issued after execution of this Agreement; these form
the Contract, and are as fully a part of the Contract as if attached to this
Agreement or repeated herein. The Contract represents the entire and integrated
agreement between the parties hereto and supersedes prior negotiations,
representations or agreement, either written or oral. An enumeration of the
Contract Documents, other than Modifications, appears in Article 9.

ARTICLE 2
THE WORK OF THIS CONTRACT

ARTICLE 3
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION

(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice to proceed.)

3.2 The Contractor shall achieve Substantial Completion of the entire Work not
later than: 180 Days

(Insert provisions, if any, for liquidated damages relating to failure to
complete on time.)

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.
<PAGE>
3

ARTICLE 4
CONTRACT SUM

4.1 The Owner shall pay the Contractor in current funds for the Contractor's
performance of the Contract the Contract Sum of One Million Three Hundred Forty
Two Thousand Six Hundred Three Dollars ($1,342,603.00), subject to additions and
deductions as provided in the Contract Documents.

4.2 The Contract Sum is based upon the following alternates, if any, which are
described in the Contract Documents and are hereby accepted by the Owner: Not
Applicable

ARTICLE 5
PROGRESS PAYMENTS

5.5 Applications for Payment shall indicate the percentage of completion of each
portion of the Work as of the end of the period covered by the Application for
Payment.

5.6 Subject to the provisions of the Contract Documents, the amount of each
progress payment shall be computed as follows:

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.
<PAGE>
4

5.6.4 Subtract amounts, if any, for which the Architect has withheld or
nullified a Certificate for Payment as provided in Paragraph 9.5 of the General
Conditions.

5.7 The progress payment amount determined in accordance with Paragraph 5.6
shall be further modified under the following circumstances:

ARTICLE 6
FINAL PAYMENT

ARTICLE 7
MISCELLANEOUS PROVISIONS

(Insert rate of interest agreed upon, if any.) 8% per annum.

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.
<PAGE>
5

7.3 Other provisions:

(a) The contractor will provide a payment and performance bond in the
amount of Four Hundred Twenty Thousand Dollars ($420,000.00). Bond to
name Comercia Bank of Texas as Co-Obligee.

(b) The contractor, and not the owner, shall purchase and maintain
property insurance as specified in paragraph 11.3 of the General
Conditions.

ARTICLE 8
TERMINATION OR SUSPENSION

8.1 The Contract may be terminated by the Owner or the Contractor as provided in
Article 14 of the General Conditions.

8.2 The Work may be suspended by the Owner as provided in Article 14 of the
General Conditions.

ARTICLE 9
ENUMERATION OF CONTRACT DOCUMENTS

9.1 The Contract Documents, except for Modifications issued after execution of
this Agreement, are enumerated as follows:

9.1.1 The Agreement is this executed Standard Form of Agreement Between Owner
and Contractor, AIA Document A101, 1987 Edition.

9.1.2 The General Conditions are the General Conditions of the Contract for
Construction, AIA Document A201, 1987 Edition.

Document Title Pages

Appendix 'A' AICI Proposal Dated May 7, 1996 5
* In the event of a confllict between the AICI Proposal and the other contract
documents, the other contract documents shall control.
9.1.4 The Specifications are those contained in the Project Manual dated as in
Subparagraph 9.1.3, and are as follows:
(Either list the Specifications here or refer to an exhibit attached to this
Agreement)

Section Title Pages
See Appendix "A"

9.1.5 The Drawings are as follows, and are dated ______________________ unless a
different date is shown below:
(Either list the Drawings here or refer to an exhibit attached to this
Agreement.)
See Appendix "A"

Number Title Date

9.1.6 The addenda, if any, are as follows:

Number Title Pages

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.
<PAGE>
6

OWNER CONTRACTOR
U.S. STORAGE/WESTHEIMER, LTD.
BY: U.S. STORAGE/WESTHEIMER, LTD. G.P., L.C.,
GENERAL PARTNER

BY: RAYMOND R. BETZ - MANAGER

/s/ Raymond R. Betz /s/ John T. Wilson
- --------------------------------------- --------------------------------
(Signature) (Signature)

John T. Wilson
- --------------------------------------- --------------------------------
(Printed name and title) (Printed name and title)

May 23, 1996 May 28, 1996
(Date) (Date)

AIA Document A101 Owner-Contractor Agreement Twelfth Edition 1987
The American Institute of Architects, 1735 New York Ave.

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the use of our report dated July 1, 1996 included herein, and
to the reference to our firm under the heading "Experts" in the Prospectus and
the Registration Statement on Amendment No. 2 to Form S-1.

/s/ HEIN + ASSOCIATES LLP

HEIN + ASSOCIATES LLP
Certified Public Accountants
Houston, Texas
December 31, 1996