SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event Reported) February 25, 1997
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Nevada No. 0-14905 13-3130236
- ----------------- ------------- -------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation
or organization)
444 MADISON AVENUE, SUITE 3203, NEW YORK, NEW YORK 10022
- -------------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(212)688-3333
(Registrant's telephone number, including area code)
-------------------------------------------------------------------
(Former name or former address if changed from last report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 25, 1997, the Registrant sold all of the issued and
outstanding shares of common stock of its wholly-owned subsidiaries,
American International Petroleum Corporation of Colombia ("AIPCC") and
Pan American International Petroleum Corporation ("PAIPC") (the
"Purchased Shares") in an arms length transaction to Mercantile
International Petroleum Inc. ("MIP").
(i) The assets of AIPCC and PAIPC consisted of oil and gas
properties and equipment in South America with an aggregate
net book value of approximately $17.9 million.
(ii) The total aggregate purchase price payable by MIP for the
Purchased Shares was valued at up to approximately $20.2
million, determined as follows:
(a) Cash payments of approximately $3.9 million, of which
approximately $2.2 million was paid simultaneously
with the closing to retire Registrant's 12% Secured
Debentures due December 31, 1997, which were secured
by the Registrant's shares of AIPCC.
(b) Assumption of AIPCC and PAIPC debt of an aggregate
amount of $634,000.
(c) 4,384,375 shares of MIP Common Stock with a trading
price of approximately $2.00 on the date the parties
agreed in principle to the sale.
(d) A two-year $3 million 5% exchangeable subordinated
debenture of AIPCC, exchangeable into shares of
common stock of MIP on the basis of $3 principal
amount of such debenture for one share of MIP on or
after February 25, 1998; or Registrant may demand
payment on that date of $1.5 million of the principal
balance thereof in cash.
(e) A $1.4 million "performance earn-out" from future
production in Colombia, plus interest at 8% per
annum.
(f) Up to $2.5 million (reduced proportionately to the
extent the Net Operating Loss and Deferred Cost
Deductions accrued by AIPCC through December 31, 1996
("Accrued Tax Benefit Deductions") is less than $50
million but more than $20 million) payable from 25%
of AIPCC's future tax savings related to any Accrued
Tax Benefit Deductions available to AIPCC on future
tax filings in Colombia.
(iii) As a result of this disposition, the Registrant now owns
approximately 11.3% of MIP's outstanding share capital on a
fully-diluted basis (47,720,867 shares). MIP is traded in U.S.
Dollars on the Toronto Stock Exchange under the symbol MPT.U.
On March 6, 1997, the closing price of MIP's common stock was
$1.95 per share.
(iv) The Registrant intends to utilize the proceeds to repay
certain debts, expand its refinery and for general corporate
use.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of businesses acquired.
None
<PAGE>
(b) Pro-forma financial information.
Unaudited Pro Forma Condensed Financial Statements
The following unaudited pro forma consolidated statements of operations
of the Company for the year ended December 31, 1996 and the unaudited proforma
condensed balance sheet of the Company as of December 31, 1996 (the "Unaudited
Pro Forma Consolidated Financial Statements") give effect to the sale of the
Company's wholly-owned South American oil and gas subsidiaries (the "Sale").
The unaudited pro forma condensed statements of operations and balance
sheet for the year ended December 31, 1996 were prepared assuming that the
transaction described above was consummated as of the beginning of the period
presented.
The pro forma adjustments and the resulting Unaudited Pro Forma
Condensed Financial Statements have been prepared based upon available
information and certain assumptions and estimates deemed appropriate by the
Company. The Company's management believes that the pro forma adjustments and
underlying assumptions and estimates reasonably present the significant effects
of the transactions reflected thereby and that any subsequent changes in the
underlying assumptions and estimates will not materially affect the Unaudited
Pro Forma Condensed Financial Statements presented herein. The Unaudited Pro
Forma Condensed Financial Statements do not purport to represent what the
Company's financial position or results of operations actually would have been
had the Sale occurred on the dates indicated or to project the Company's
financial position or results of operations for any future date or period.
Furthermore, the Unaudited Pro Forma Condensed Financial Statements do not
reflect changes that may occur as the result of post-sale activities and other
matters.
<PAGE>
AMERICAN INTERNATIONAL PETROLEUM CORPORATION AND SUBSIDIARIES
UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Historical Historical
Consolidated South American Pro Forma
AIPC Subsidiaries Balance Sheet
December 31, December 31, Sale December 31,
1996 1996 Adjustments 1996
---------------- ----------------- ---------------- ----------------
(1) (2) (3)
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 11,058 $ (1,451) $ 1,476,000(3a) $ 1,488,509
Cash - restricted 161,022 131,897 - 29,125
Marketable securites - 8,768,750(3b) 8,768,750
Accounts receivable, net 1,073,140 799,399 1,500,000(3c) 1,773,741
Inventory 459,961 459,961 - -
Prepaid expenses 838,104 400,737 - 437,367
---------------- ----------------- ---------------- ----------------
Total current assets 2,543,285 1,790,543 11,744,750 12,497,492
---------------- ----------------- ---------------- ----------------
Property, plant and equipment:
Unevaluated property not subject to amortization 5,648,630 5,187,576 - 461,054
Oil and gas property pursuant to full cost method 32,506,656 32,506,656 - -
Refinery property and equipment 17,235,183 - - 17,235,183
Other 499,971 307,003 - 192,968
---------------- ----------------- ---------------- ----------------
55,890,440 38,001,235 - 17,889,205
Less - accumulated depreciation, depletion
and amortization (23,959,191) (20,289,573) - (3,669,618)
---------------- ----------------- ---------------- ----------------
Total property, plant and equipment 31,931,249 17,711,662 - 14,219,587
---------------- ----------------- ---------------- ----------------
Other long-term assets, net 17,897 - 2,096,854(3d) 2,114,751
---------------- ----------------- ---------------- ----------------
TOTAL ASSETS $ 34,492,431 $ 19,502,205 $ 13,841,604 $ 28,831,830
================ ================= ================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 237,162 $ 137,162 $ (100,000)(3e) -
Current installments of long-term debt 5,968,393 - (2,337,500)(3f) 3,630,893
Accounts payable 3,636,765 2,072,752 - 1,564,013
Accrued expenses & other liabilities 2,524,194 332,042 (681,145)(3g) 1,511,007
--------------- ---------------- ---------------- ---------------
Total current liabilities 12,366,514 2,541,956 (3,118,645) 6,705,913
Long term debt 798,199 - - 798,199
---------------- ----------------- ---------------- ----------------
TOTAL LIABILITIES 13,164,713 2,541,956 (3,116,645) 7,504,112
---------------- ----------------- ---------------- ----------------
Stockholders' equity:
Preferred stock, par value $.01,
authorized 7,000,000 shares, none issued - - - -
Common stock, par value $.08, 100,000,000 - -
shares authorized, 34,458,921 shares - -
issued and outstanding at December 31, 1996 - -
and 24,705,926 shares at December 31, 1995 2,756,714 - - 2,756,714
Additional paid-in capital 78,677,265 - - 78,677,265
Stock purchase warrants 1,297,754 - - 1,297,754
Accumulated Deficit (61,404,015) 16,960,249 16,960,249 (61,404,015)
---------------- ----------------- ---------------- ----------------
TOTAL STOCKHOLDERS' EQUITY 21,327,718 16,960,249 16,960,249 21,327,718
---------------- ----------------- ---------------- ----------------
Commitments and Contingencies - - - -
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 34,492,431 $ 19,502,205 $ 13,841,604 $ 28,831,830
================ ================= ================ ================
</TABLE>
(1) December 31, 1996 Consolidated Balance Sheet
(2) December 31, 1996 Balance Sheet of South American subsidiaries
(3) Adjustments to reflect the sale of the South American Subsidiaries
(3a) Cash received from sale of South American Subsidiaries
(3b) 4,384,375 shares of common, free-trading stock of the purchaser recorded
at $2.00 @ share
(3c) Current portion of $3,000,000, 5%, subordinated debenture received from
the purchaser
(3d) Long-term portion of (3c) above equal to $1,500,000, less discount of
$300,000. Performance earn-out on future revenues of the purchaser of
$1,048,655, less discount of $151,801
(3e) Assumption of note by the purchaser
(3f) Asssumption of outstanding 12% subordinated debentures by purchaser
(3g) Assumption of a certain accrued expenses and other liabilities by the
purchaser
<PAGE>
AMERICAN INTERNATIONAL PETROLEUM CORPORATION AND SUBSIDIARIES
UNAUDITED PROFORMA CONSOLIDATED STATEMENTS OF OPERATIONS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Historical Historical
Consolidated South American
AIPC Subsidiaries Pro Forma
Years ended Year ended Years ended
December 31, December 31, Sale December 31,
1996 1996 Adjustments 1996
------------ ------------------ ------------ -----------------
(1) (2) (3)
<S> <C> <C> <C> <C>
Revenues:
Oil and gas production and
pipeline fees $ 1,364,581 $ 1,364,581 $ -- $ --
Refinery lease fees 2,467,606 -- -- 2,467,606
Other 278,327 143,679 233,892 (3a) 368,540
------------ ------------ ----------- ------------
Total revenues 4,110,514 1,508,260 233,892 2,836,146
------------ ------------ ----------- ------------
Expenses:
Operating 613,336 611,856 -- 1,480
General and administrative 3,076,357 268,718 -- 2,807,639
Depreciation, depletion and
amortization 1,265,230 587,207 -- 678,023
Interest 2,818,218 78,230 (420,750) (3b) 2,319,238
Write-down of oil and gas properties 200,000 200,000 -- --
Provision for bad debts 789,580 884 -- 788,696
------------ ------------ ------------- ------------
Total expenses 8,762,721 1,746,895 (420,750) 6,595,076
------------ ------------ ------------- ------------
Net loss $ (4,652,207) $ (238,635) $ 654,642 $ (3,758,930)
============ ============ ============= =============
Net loss per share of common stock $ (0.16) $ (0.01) $ 0.02 $ (0.13)
============ ============ ============= =============
Weighted-average number of shares
of common stock outstanding 29,598,832 29,598,832 29,598,832 29,598,832
============ ============ ============ =============
</TABLE>
(1) Year ended December 31, 1996 Consolidated Statements of Operations
(2) Historical Year ended December 31, 1996 South American Statement of
Operations
(3) Adjustments to reflect the sale of the South American Subsidiaries
(3a) Pro forma reduction in interest income on current and long term notes
and deferred income due from the purchaser arising from sale of South
American subsidiaries
(3b) Pro forma reduction of interest expense due to the assumption of debt
by the acquirer of the South American subsidiaries
(C) EXHIBITS:
<TABLE>
EXHIBIT NO. DESCRIPTION
<S> <C>
99.1 Share Purchase Agreement dated February 25,
1997, among the Registrant, AIPCC, PAIPC and
MIP.*
99.2 $3 million 5% exchangeable debenture, granted by AIPCC to
the Registrant, due February 25, 1999.*
99.3 Pledge Agreement dated February 25, 1997
among the Registrant, MIP and MG Trade
Finance Corp.*
</TABLE>
*Submitted with the original Form 8-K filed on March 12, 1997.
-2-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: November 19, 1997
AMERICAN INTERNATIONAL
PETROLEUM CORPORATION
By: /s/ Denis J. Fitzpatrick
------------------------------
Denis J. Fitzpatrick
Chief Financial Officer
-3-
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
99.1 Share Purchase Agreement dated February 25,
1997, among the Registrant, AIPCC, PAIPC and
MIP.
99.2 $3 million 5% exchangeable debenture,
granted by AIPCC to the Registrant, due
February 25, 1999.
99.3 Pledge Agreement dated February 25, 1997
among the Registrant, MIP and MG Trade
Finance Corp.
4
<PAGE>
