As filed with the Securities and Exchange Commission on December 3, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 13-3130236
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
444 Madison Ave
New York, New York 10022
(212) 688-3333
(Address and telephone number of
registrant's principal executive offices)
-------------------------------------
JOE MICHAEL MCKINNEY
Chief Executive Officer
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
444 Madison Avenue, Suite 3203
New York, New York 10022
Telephone: (212) 688-3333
Telecopier: (212) 688-6657
(Name, address and
telephone number of agent for service)
----------------------------
Copies to:
CHARLES SNOW, ESQ.
SNOW BECKER KRAUSS P.C.
605 Third Avenue
New York, New York 10158-0125
Telephone: (212) 687-3860
Fax: (212) 949-7052
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
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, other than securities offered only in connection with dividend or interest
reinvestment plans, 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. [ ]
------------------------
<PAGE>
<TABLE>
<CAPTION> CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Each Amount Maximum Maximum Amount of
of Securities to be Offering Price Aggregate Registration
to be Registered Registered Per Security(1) Offering Price Fee
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.08 par 10,584,933 $.47 $4,874,919 $1,382.53
value
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 promulgated under the Securities Act of 1933.
(2) Represents shares to be sold by the selling securityholders named in this
registration statement, including:
o up to 9,559,933 shares that may be acquired upon conversion of, or in
payment of accrued interest on, the Registrant's 6% secured
convertible debentures due November 2, 2004.
o 375,000 shares that may be acquired upon exercise of outstanding
warrants issued with our 6% convertible debentures.
o 650,000 shares that may be acquired upon the exercise of other
outstanding warrants.
Also includes an indeterminate number of shares that the selling
securityholders may acquire as a result of a stock split, stock dividend or
similar transaction involving the common stock pursuant to the antidilution
provisions of the debentures and warrants.
(3) Calculated solely for the purpose of determining the registration fee
pursuant to Rule 457 (c) based upon the closing price of the common stock
on the NASDAQ National Market on December 1, 1999.
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, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
================================================================================
<PAGE>
INFORMATION CONTAINED IN THIS PROSPECTUS 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 STATE.
Preliminary Prospectus Dated December 3, 1999, Subject To Completion
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
Common Stock
The selling securityholders named in this prospectus are offering and selling
o shares of our common stock that they may acquire upon conversion of, or in
payment of six months accrued interest on, our 6% secured convertible
debentures due November 2, 2004
o 1,025,000 shares of our common stock that they may acquire upon exercise of
outstanding warrants
The common stock is quoted on the NASDAQ National Market under the symbol
"AIPN".
The common stock is a speculative investment and involves a high degree of risk.
You should read the description of certain risks under the caption "Risk
Factors" commencing on page 3 before purchasing the common stock.
These securities have not been approved or disapproved by the SEC or any state
securities commission nor has the SEC or any state securities 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 _____, 1999
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<PAGE>
Table of Contents
Page
----
Risk Factors ............................................................ 3
Forward Looking Statements .............................................. 8
Selling Securityholders ................................................. 8
Plan of Distribution .................................................... 10
Information About American International
Petroleum Corporation ................................................. 12
Where You Can Find More Information ..................................... 12
Information Incorporated By Reference ................................... 12
Legal Matters ........................................................... 13
Experts ................................................................. 13
----------------------
This prospectus is part of a registration statement we filed with the SEC. You
should rely only on the information or representations provided in this
prospectus. We have not authorized anyone to provide you with different
information. The common stock will not be offered in any state where an offer is
not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the cover of this prospectus.
2
<PAGE>
Risk Factors
WE HAVE A HISTORY OF OPERATING LOSSES AND THESE LOSSES MAY CONTINUE.
We have experienced significant losses since we began operations. We incurred
net losses of approximately $9.1 million for the year ended December 31, 1998,
approximately $18 million for the year ended December 31, 1997 and approximately
$4.7 million for the year ended December 31, 1996, and a net loss of
approximately $11.7 million for the nine months ended September 30, 1999 as
compared to a net loss of approximately $3.5 million for the nine months ended
September 30, 1998. As a result of these losses, as of September 30, 1999, we
had an accumulated deficit of approximately $100 million. We will continue to
incur losses until our asphalt and/or refining operations or Kazakstan projects
generate substantial revenues. We expect our expenses to increase as we expand
our business. We cannot assure you that our revenues will increase as a result
of our increased spending. If revenues grow more slowly than we anticipate, or
if operating expenses exceed our expectations, we may not become profitable.
Even if we become profitable, we may be unable to sustain our profitability.
OUR AUDITORS HAVE ISSUED A GOING CONCERN COMMENT ON OUR FINANCIAL
STATEMENTS.
In connection with the audit of our financial statements for the year ended
December 31, 1998, Hein + Associates, LLP, our independent auditors, included an
explanatory paragraph in its report on our financial statements as to our
ability to continue as a "going concern " as a result of
o a net loss of approximately $9.1 million during 1998, of which
approximately $4.6 million represented non-operating or non-cash items
o commitments to fund our Kazakstan subsidiary of approximately $12
million through 2001
o a working capital deficit of approximately $4.9 million at December
31, 1998
OUR AVAILABLE CASH RESOURCES, TOGETHER WITH ANTICIPATED CASH FLOWS FROM
OPERATIONS, MAY NOT BE SUFFICIENT TO CONTINUE OUR OPERATIONS AT CURRENT LEVELS
AND TO SATISFY OUR FUNDING OBLIGATIONS, WITHOUT ADDITIONAL FINANCING.
We may require additional financing in the next 12 months to supplement
anticipated cash flows from our asphalt and refining operations in Lake Charles,
Louisiana in order to meet operating and other funding obligations. In the event
we are unable to obtain the necessary financing to meet these obligations, our
ability to continue operations at current levels will be materially and
adversely effected. We may need to raise additional funds through public or
private financings, including equity financings, that may be dilutive to
stockholders.
We cannot give you any assurance that we will be able to raise additional funds
if our capital resources are exhausted, or that funds will be available on terms
acceptable to us or at all.
WE DO NOT HAVE ANY PROVEN RESERVES OF GAS OR OIL.
Although we have identified structures within our Kazakstan license area, we
have only just begun to drill these prospects, and accordingly, we do not have
any proven reserves of oil and gas.
WE MAY SUFFER CAPITAL LOSSES BECAUSE OF THE SPECULATIVE NATURE OF THE OIL
AND GAS BUSINESS.
We have experienced capital losses as a result of the speculative nature of the
oil and gas industry, and we may experience such capital losses in the future.
Even if reserves are found as a result of drilling, profitable production from
reserves cannot be assured.
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<PAGE>
We may not recover any oil or gas from drilling and if we do recover oil or gas,
market conditions may be unfavorable and we may not be able to recover the costs
of the drilling or receive any profits. In addition, our current financial
condition and available cash resources may prevent our ability to drill offset
wells.
WE ARE SUBJECT TO LOSSES FROM DRILLING AND OTHER HAZARDS.
Unusual or unexpected formation pressures, down-hole fires or other hazardous
conditions may be encountered in drilling oil and gas wells and in the refining
of oil. If we encounter such hazards, completion of wells or production of
asphalt products may be substantially delayed and the costs significantly
increased, and in the case of asphalt products, may result in the cancellation
of customer contracts and adversely affect our ability to attract future
business. Even though a well is completed and is found to be productive, water
or other deleterious substances may be encountered, which may impair or prevent
production of oil or gas, and which may adversely affect our operations. Since
our refineries are located on inland waterways, floods and adverse weather
conditions can hinder or delay feedstock and transportation of products at our
refineries in Lake Charles, Louisiana and St. Marks, Florida. Labor disputes,
work stoppages, shortages of equipment and materials or the unavailability of
oil or asphalt barges and drilling rigs can also disrupt drilling and production
operations.
OUR BUSINESS IS SUBJECT TO ENVIRONMENTAL RISKS.
Extensive national and/or local environmental laws and regulations in both the
United States and Kazakstan affect nearly all of our operations. These laws and
regulations set various standards regulating certain aspects of health and
environmental quality, provide for penalties and other liabilities for the
violation of such standards and establish in certain circumstances obligations
to remediate current and former facilities and off-site locations. We may incur
substantial financial obligations in connection with environmental compliance.
We are occasionally subject to non-recurring environmental costs. The annual
cost incurred in connection with these assessments varies from year to year,
depending upon our activities in that year. The costs of such environmental
impact assessments were not material in 1998, but may be in the future. We are
not aware of any other anticipated nonrecurring environmental costs.
Kazakstan has comprehensive environmental laws and regulations and has adopted
the environmental standards set out by the World Bank organizations. Enforcement
is administered through the Kazakstan Ministry of Environment and related local
state agencies. Our operations require a comprehensive environmental permit for
all drilling and exploration activities.
We have no currently outstanding or anticipated reclamation issues in the United
States or abroad.
Our operations are subject to all of the environmental risks normally incident
to oil and gas exploration, drilling, and refining activities, which include,
but are not limited to, blowouts, pollution and fires. Any of these occurrences
could result in environmental damage or destruction, including the discharge of
hazardous materials into the environment. Although we maintain comprehensive and
general liability coverage as is customary in the oil and gas industry, and
coverage against certain risks, we are not fully covered for damages incurred as
a consequence of environmental mishaps. To the extent we are covered, the
coverage may not be adequate protection in the event of an environmental
problem.
WE MAY EXPERIENCE DIFFICULTIES IN MARKETING SOME OF OUR PRODUCTS.
Our ability to market some of our products depends upon
o the proximity, capacity and cost of oil or gas pipelines and other
facilities for the transportation of oil or gas
o the quantity and quality of the oil or gas produced
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o our ability to provide asphalt products which satisfy state and
federal highway quality specifications
o the availability and cost of asphalt barges to transport asphalt
products
GOVERNMENT LEGISLATION IN KAZAKSTAN AND OTHER FOREIGN COUNTRIES THROUGH
WHICH OUR PRODUCTS MAY BE TRANSPORTED MAY AFFECT OUR BUSINESS.
Our exploration in western Kazakstan is subject to regulations imposed by the
Kazakstan government. The Kazakstan government may limit oil and gas production
and impose taxes on oil and gas when sold. We cannot predict whether such
governmental actions may occur, nor anticipate the ultimate effect of
governmental policies and contracts upon us. We also will be subject to the laws
of jurisdictions through which oil and gas pipelines traverse. We cannot predict
what policies these jurisdictions may follow, nor the impact of local
regulations on our business.
OUR BUSINESS IS SUBJECT TO POLITICAL AND ECONOMIC CONDITIONS IN KAZAKSTAN.
A favorable political climate in Kazakstan and the openness of its markets to
United States trade is essential to our success in Kazakstan. Kazakstan is a
former constituent republic of the Soviet Union which declared its independence
from the Soviet Union in December 1991. At the time of its independence, it
became a member of the Commonwealth of Independent States, or CIS, the
association of former Soviet states which have entered into agreements of
cooperation and support for trade, border protection, immigration controls,
environmental matters and overall cooperation for the economic and political
stability and development of the member states. The Confederation of Independent
States have embraced political and economic reforms, but, there remains
political and economic instability the result of which could be detrimental to
our operations there.
Because the CIS countries are in the early stages of development of a market
economy, the commercial framework in still developing along with commercial
laws, their applications and the enforcement of these laws. Although Kazakstan's
laws regarding foreign investment provide for protection against nationalization
and confiscation, there is little or no judicial precedent in this area. Foreign
firms operating in this region may be subject to numerous other risks that are
not present in domestic operations, including political strife, the possibility
of expropriation, inadequate distribution facilities, inflation, fluctuations of
foreign currencies, high and unpredictable levels of taxation, requirements for
governmental approvals for new ventures, local participation in operations, and
restrictions on royalties, dividends and currency remittances. Currently, there
are no restrictions on royalties, dividends or currency remittances.
OUR BUSINESS IS SUBJECT TO FOREIGN CURRENCY RISKS.
Since we have oil and gas operations outside the United States, our business is
subject to foreign currency risks. These risks include
o The value of the local currency in Kazakstan relative to the U.S.
dollar may continue to decline and is subject to continued volatility.
o We may encounter difficulties in coverting local currencies to U.S.
dollars. Although Kazakstan laws permit the conversion of local
currency into foreign currency, the local currency generally is not
convertible outside CIS countries. If we discover oil or gas in our
licensed area in Kazakstan and sell the oil and gas in a CIS country,
currency liquidity and restrictions may adversely affect us.
o The market for conversion of local currency into other currencies may
deteriorate or cease to exist. Although a market exists within CIS
countries for the conversion of CIS currencies into other currencies,
it is limited in size and subject to rules limiting the purposes for
which conversion may be effected. In addition, the availability of
other currencies may inflate their values relative to CIS currencies.
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<PAGE>
WE MAY ENCOUNTER DELAYS IN TRANSFER OF FUNDS IN AND OUT OF KAZAKSTAN SINCE
ITS BANKING SYSTEM IS NOT WELL DEVELOPED.
Since the banking system in Kazakstan is not yet as developed as its Western
counterparts, we may encounter considerable delays in the transfer of funds
within, and the remittance of funds out of Kazakstan. Any delay in converting
Kazakstan currency into a foreign currency in order to make a payment, or delay
in the transfer of such currency could have a material adverse effect on our
business.
WE MAY EXPERIENCE DIFFICULTIES IN REPATRIATING PROFITS AND CAPITAL
While applicable legislation in the CIS currently permits the repatriation of
profits and capital and the making of other payments in hard currency, our
ability to repatriate such profits and capital and to make such other payments
is dependent upon the continuation of the existing legal regimes for currency
control and foreign investment, administrative policies and practices in the
enforcement of such legal regimes and the availability of foreign exchange in
sufficient quantities in those countries.
OUR ASPHALT OPERATIONS HAVE BEEN LIMITED.
Since the first quarter of 1998, we have been engaged in the production and sale
of asphalt products at our refinery in Lake Charles, Louisiana. Our refinery
operation is subject to all of the risks and hazards associated with the
establishment of a new business. To date, we have encountered mechanical
problems with equipment, delays caused by unavailability of asphalt barges,
shortages of economically-priced feedstocks, and unanticipated expenses for
refinery repairs and transportation fees. Since the Company is blending asphalt
and not processing crude oil, its crude unit has been idle for most of 1999,
consequently, the Company has had minimal revenues from light-end products. In
addition, because of the resultant lower throughput volumes, increased costs for
feedstock, and the fact that expected increases in its product prices resulting
from high crude oil prices did not occur, cash flows derived from the Company's
asphalt sales have been lower during the first three quarters of 1999 compared
to the same period last year. Because of the dramatic reduction in crude oil
feedstock supplies, unless the Company agrees to operate its refining unit for
other companies, which it is currently considering, it does not expect to
operate the unit during 1999.
OUR SUCCESS IS DEPENDENT ON OUR KEY PERSONNEL WHO WE MAY NOT BE ABLE TO
RETAIN AND WE MAY NOT BE ABLE TO HIRE ADDITIONAL QUALIFIED PERSONNEL TO SATISFY
OUR PERSONNEL NEEDS.
Our success is dependent upon the efforts, abilities and expertise of our
Chairman of the Board, Dr. George N. Faris, our Chief Executive Officer, Mr. Joe
Michael McKinney, as well as other key management personnel. Our future success
also is dependent, in part, on our ability to attract and retain qualified
personnel. We cannot give you any assurance that we will be able to attract and
retain qualified individuals. As compared to other publicly traded oil and gas
companies, we have fewer resources to attract and/or retain key personnel, and
we do not have the depth of managerial employees to rely upon in the event of
the loss of any single employee. Accordingly, the loss of any key employee could
have a material adverse affect on the operations of our business.
OUR COMMON STOCK MAY BE DELISTED FROM THE NASDAQ NATIONAL MARKET FOR
FAILURE TO SATISFY NASDAQ'S REQUIREMENTS FOR CONTINUED LISTING.
Our common stock is traded on the NASDAQ National Market System. To continue our
listing, we are required to maintain net tangible assets of at least $4,000,000
and the bid price of our common stock must be at least $1.00 per share. By
letter dated October 1, 1999, NASDAQ notified us that our common stock failed to
satisfy its minimum bid price standard for continued listing since the closing
bid price of a share of our common stock had been less than $1.00 for 30
consecutive trading days. Under NASDAQ rules, we may achieve compliance with the
minimum bid price requirement for continued listing on NASDAQ if at any time
before December 30, 1999, the bid price of a share of our common stock is at
least $1.00 for at least ten consecutive trading days. If we are able to
demonstrate
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compliance with the minimum bid price requirement by December 30, 1999, absent
an appeal by the Company, our common stock will be delisted at the opening of
business on January 3, 2000. If we are delisted and we do not then qualify for a
listing on a stock exchange, our common stock would be traded in the
over-the-counter market and quoted on the NASDAQ's Electronic Bulletin Board or
the "pink sheets". Consequently, it may be more difficult for an investor to
obtain price quotations for our common stock or to sell it.
IF OUR COMMON STOCK IS DELISTED, IT MAY BECOME SUBJECT TO THE SEC'S "PENNY
STOCK" RULES AND MORE DIFFICULT TO SELL.
SEC rules require brokers to provide information to purchasers of securities
traded at less than $5.00 and not traded on a national securities exchange or
quoted on the NASDAQ Stock Market. If our common stock becomes a "penny stock"
that is not exempt from the SEC rules, these disclosure requirements may have
the effect of reducing trading activity in our common stock and make it more
difficult for investors to sell. The rules require a broker-dealer to deliver a
standardized risk disclosure document prepared by the SEC that provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker must also give bid and offer quotations and broker and
salesperson compensation information to the customer orally or in writing before
or with his confirmation. The SEC rules also require a broker to make a special
written determination that the penny stock is a suitable investment for the
purchaser and receive the purchaser's written agreement to the transaction
before a transaction in a penny stock.
POSSIBLE ADVERSE EFFECT OF FUTURE SALES OF COMMON STOCK ON THE MARKET PRICE
OF THE COMMON STOCK.
As of December 1, 1999, there were 82,426,740 shares of common stock
outstanding, of which 71,886,787 shares are transferable without restriction
under the Securities Act. The remaining 10,539,953 shares are restricted
securities which may be publicly sold only if registered under the Securities
Act or sold in accordance with an applicable exemption from registration, such
as Rule 144.
o 25,616,438 shares may be acquired upon conversion of, and upon payment
of accrued interest on, our 5% convertible debenture due February 18,
2004, at an assumed conversion price of $.40 per share. The actual
conversion price is 85% of the average of the lowest 3 daily weighted
average sale prices for the 20 trading days prior to the date of
conversion. The maximum conversion price was originally $1.288, but
has been reduced to $1.214 under the antidilution provisions of our 5%
convertible debentures as a result of the issuance of our 6%
securities convertible debentures. Since there is no minimum
conversion price, if the market price of the common stock declines
below the assumed conversion price, the number of shares that may be
acquired upon conversion will increase.
o 14,028,152 shares may be acquired upon conversion of, and upon payment
of six months accrued interest on, our 6% secured convertible
debentures due 2004, based upon an assumed conversion price of $.40
per share. The actual conversion price is 85% of the average of the
three lowest closing bid prices of the common stock for the twenty-day
trading period prior to the date of conversion. The maximum conversion
price is $1.214. Since there is no minimum conversion price, if the
market price of the common stock declines below the assumed conversion
price, the number of shares that may be acquired upon conversion will
increase.
o 5,297,275 shares may be acquired upon exercise of stock options
granted pursuant to our employee stock option plans at exercise prices
ranging from $.50 to $2.00 per share.
o 8,436,286 shares may be acquired upon exercise of warrants having
exercise prices ranging from $.41 to $3.00 per share.
Substantially all of such shares, when issued, may be immediately resold in the
public market pursuant to effective registration statements under the securities
act. We cannot give you any assurance as to the effect, if any, that future
sales of common stock, or the availability of shares of common stock for future
sales, will have on the market
7
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price of the common stock from time to time. Sales of substantial amounts of
common stock, or the possibility of such sales, could adversely affect the
market price of the common stock and also impair our ability to raise capital
through an offering of equity securities in the future.
Forward Looking Statements
Some of the information in this prospectus and the documents we incorporate by
reference may contain forward-looking statements. Such statements can be
identified by the use of forward-looking terminology such as may, "will,"
"expect," "believe," "intend," "anticipate," "estimate," "continue" or similar
words. These statements discuss future expectations, estimate the happening of
future events or our financial condition or state other "forward-looking"
information. When considering such forward-looking statements, you should keep
in mind the risk factors and other cautionary statements in this prospectus and
the documents that we incorporate by reference. The risk factors noted in this
section and other factors noted throughout this prospectus, including certain
risks and uncertainties, could cause our actual results to differ materially
from those contained in any forward-looking statement.
Selling Securityholders
The following table sets forth the names of the selling securityholders, the
number of shares of common stock beneficially owned by each selling
securityholder as of December 1, 1999, the number of shares that each selling
securityholder may offer, and the number of shares of common stock beneficially
owned by each selling securityholder upon completion of the offering, assuming
all of the shares are sold. None of the selling securityholders has, or within
the past three years has had, any position, office or other material
relationship with American International Petroleum Corporation or any of its
predecessors or affiliates.
The selling securityholders are offering up to 7,459,933 shares of common stock
by this prospectus, including
o up to 6,434,933 shares that they may acquire upon conversion of, and
in payment of six months accrued interest on, $2.5 million principal
amount of our 6% convertible debentures, at an assumed conversion
price of $.40 per share. The actual conversion price is 85% of the
average of the three lowest prices of the common stock for the 20-day
trading period prior to the date of conversion. The maximum conversion
price is $1.214. There is no minimum conversion price. If the market
price of the common stock declines below the assumed conversion price,
the number of shares that may be acquired upon conversion will
increase. Since the actual conversion price may be less than the
assumed conversion price as a result of a decline in the market price
of the common stock and as required by the terms of the purchase and
registration rights agreements with the purchasers of the 6%
convertible debentures, we have registered 9,559,933 shares of common
stock for resale by the selling securityholders on conversion of, and
in payment of six months accrued interest on, our 6% convertible
debentures. Of this amount, 9,375,000 shares represent 150% of the
6,250,000 shares that the selling securityholders may acquire upon
conversion of the convertible debentures at the assumed conversion
price of $.40, and 184,933 shares represent payment of six months
accrued interest on the convertible debentures at the assumed
conversion price.
o 375,000 shares that they may acquire upon exercise of warrants issued
with our 6% convertible debentures.
o 650,000 shares that they may acquire upon exercise of other
outstanding warrants.
The number of shares listed below as beneficially owned before the offering by
each selling securityholder owning our 6% convertible debentures has been
computed without giving effect to the terms of the convertible debentures, which
provide that the number of shares that the selling securityholder may acquire
upon conversion of the convertible debentures may not exceed that number which
would:
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1. render that selling securityholder the beneficial owner of more than
4.9% of the then issued and outstanding shares of common stock, or
2. result in the issuance of an aggregate of more than 15,146,446 shares
of common stock, representing 19.9% of the shares of common stock
outstanding on the date the convertible debentures were first issued,
until stockholders approve the issuance upon conversion of more than
that number of shares, as required by the rules of The NASDAQ Stock
Market, Inc.
The convertible debentures were sold in two tranches. Convertible debentures in
the principal amount of $4,750,000 were sold in the first tranche on August 19,
1999 and convertible debentures in the principal amount of $2,500,000 were sold
in the second tranche on November 4, 1999.
A selling securityholder that acquires shares upon conversion of the convertible
debentures may not sell on any day a number of shares greater than fifteen
percent (15%) of the daily sales volume of our common stock as reported by
Bloomberg L.P. on that date.
As of December 1, 1999, we had 82,426,740 shares of common stock outstanding.
For purposes of computing the number and percentage of shares beneficially owned
by each selling securityholder as of December 1, 1999, any shares which such
person has the right to acquire within 60 days after such date are deemed to be
outstanding, but are not deemed to be outstanding for the purpose of computing
the percentage ownership of any other selling securityholder. The information
presented in the table, with respect to holders of convertible debentures and
the warrants issued therewith, does not give effect tot he terms of the
convertible debentures and warrants that limit the number of shares that any
holder may acquire upon conversion or exercise of these securities to 4.9% of
the then issued and outstanding shares of common stock.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Of Common Stock Before Shares of Common of Common Stock
Offering Stock Offered After Offering
------------------------ ------------- ------------------------
Number Percent Number Percent
------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Holders of
Convertible
Debentures and
Warrants:
Mount Albion LLC 13,641,166(1) 13.7% 5,447,946(2) 8,193,220(3) 9.1%
C/o CITCO Fund Services
Bahamas Financial Center
3rd Floor
Shirley & Charlotte Streets
CB13136 Nassau, Bahamas
AMRO International S.A 1,474,487(1) 1.8% 1,361,987(4) 112,500(5) *
Grossmunster Plaz
Zurich CH8022 Switzerland
Holders of Warrants:
Charles Nelson 100,000 * 100,000 0 *
450 Park Avenue
New York, NY 10022
GCA Strategic Investment Fund(6) 650,000 * 450,000 200,000 *
c/o Prime Management Ltd.
12 Church Street
Hamilton, Bermuda HM11
LKB Financial LLC (5) 726,050 * 100,000 626,050 *
4555 Mansell Road
Suite 300
Alpharetta, GA 30202
</TABLE>
9
<PAGE>
- -------------
* Less than one percent (1%).
(1) Represents the number of shares that the selling securityholder may
acquire upon exercise of warrants and conversion of, and in payment of
six months accrued interest on, the convertible debentures at an
assumed conversion price of $.40 per share. The actual conversion
price is 85% of the three lowest closing bid prices of the common
stock for the twenty day trading period prior to the date of
conversion. The maximum conversion price is $1.214. Since there is no
minimum conversion price, if the market price of the common stock
declines below the assumed conversion price, the number of shares that
may be acquired upon conversion will increase.
(2) Represents the number of shares that may be acquired upon conversion
of, and in payment of six months accrued interest on, the $2,000,000
principal amount of convertible debentures, and upon exercise of
warrants to purchase 300,000 shares, purchased in the second trance on
November 4, 1999.
(3) Represents the number of shares that may be acquired upon conversion
of, and in payment of six months accrued interest on, $2,950,000
principal amount of convertible debentures, and upon exercise of
warrants to purchase 600,000 shares purchased in the first tranche on
August 19, 1999, offered for sale under a prospectus dated October 4,
1999.
(4) Represents the number of shares that may be acquired upon conversion
of, and in payment of six months accrued interest on, the $500,000
principal amount of convertible debentures, and upon exercise of
warrants to purchase 75,000 shares purchased in the second tranche on
November 4, 1999.
(5) Represents shares that may be acquired upon exercise of warrants to
purchase 112,500 shares offered for sale under a prospectus dated
October 4, 1999.
(6) Lewis Lester and Michael Brown are the principals of GCA Strategic
Investment Fund Limited and LKB Financial LLC.
The shares of common stock offered by this prospectus that may be acquired by
holders of our 6% convertible debentures and warrants have been registered in
accordance with registration rights that we have granted to them. We have agreed
to pay all registration and filing fees, printing expenses, blue sky fees, if
any, and fees and disbursements of our counsel. These selling securityholders
have agreed to pay any underwriting discounts and selling commissions. In
addition, we have agreed to indemnify these selling securityholders and
underwriters who may be selected by them and certain affiliated parties, against
certain liabilities, including liabilities under the Securities Act, in
connection with the offering. Although those selling securityholders also have
agreed to indemnify our officers and directors and persons controlling us
against such liabilities, we have been informed that in the opinion of the SEC
indemnification of those persons of liabilities under Securities Act is against
public policy as expressed in the Securities Act and is therefore not
enforceable.
Plan of Distribution
The selling securityholders may sell shares from time to time in public
transactions, on or off the NASDAQ National Market, or private transactions, at
prevailing market prices or at privately negotiated prices. They may sell their
shares in the following types of transactions:
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers
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<PAGE>
o a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction
o purchases by a broker or dealer as principal and resale by such broker
or dealer for its account under this prospectus
o face-to-face transactions between sellers and purchasers without a
broker-dealer
The selling securityholders also may sell shares that qualify under Section 4(1)
of the Securities Act or Rule 144. As used in this prospectus, selling
securityholder includes donees, pledges, distributees, transferees and other
successors in interest of the selling securityholders named in this prospectus.
In effecting sales, brokers or dealers engaged by the selling securityholders
may arrange for other brokers or dealers to participate in the resales. The
selling securityholders may enter into hedging transactions with broker-dealers,
and in connection with those transactions, broker-dealers may engage in short
sales of the shares. The selling securityholders also may sell shares short and
deliver the shares to close out such short positions. The selling
securityholders also may enter into option or other transactions with
broker-dealers which require the delivery to the broker-dealer of the shares,
which the broker-dealer may resell under this prospectus. The selling
securityholders also may pledge the shares to a broker or dealer and upon a
default, the broker or dealer may effect sales of the pledged shares under this
prospectus.
Brokers, dealers or agents may receive compensation in the form of commissions,
discounts or concessions from selling securityholders in amounts to be
negotiated in connection with the sale. Any broker-dealer that acts as an agent
for the purchaser may receive compensation from the purchaser.
Broker-dealers may agree with a selling securityholder to sell a specified
number of shares of common stock at a stipulated price per share, and, to the
extent such broker-dealer is unable to do so acting as agent for such selling
securityholder, to purchase as principal any unsold shares at the price required
to fulfill the broker-dealer commitment to the selling securityholder.
Broker-dealers who acquire shares of common stock as principal may then resell
such shares from time to time in transactions in the over-the-counter market or
otherwise at prices and on terms then prevailing at the time of sale, at prices
then related to the then current market price or in negotiated transactions and,
in connection with such resales, may pay or receive from the purchasers of such
shares commissions as described above.
The selling securityholders and any participating brokers or dealers may be
deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales and any such commission, discount or concession may
be deemed to be underwriting compensation.
Information as to whether underwriters who may be selected by the selling
securityholders, or any other broker-dealer, is acting as principal or agent for
the selling securityholders, the compensation to be received by them, and the
compensation to be received by other broker-dealers, in the event such
compensation is in excess of usual and customary commissions, will, to the
extent required, be set forth in a supplement to this prospectus. Any dealer or
broker participating in any distribution of the shares may be required to
deliver a copy of this prospectus, including a prospectus supplement, if any, to
any person who purchases any of the shares from or through such dealer or
broker.
We have advised the selling securityholders that during such time as they may be
engaged in a distribution of the shares they are required to comply with
Regulation M under the Securities Exchange Act. With certain exceptions,
Regulation M precludes any selling securityholders, any affiliated purchasers
and any broker-dealer or other person who
11
<PAGE>
participates in such distribution from bidding for or purchasing, or attempting
to induce any person to bid for or purchase any security which is the subject of
the distribution until the entire distribution is complete. Regulation M also
prohibits any bids or Purchases made in order to stabilize the price of a
security in connection with the distribution of that security.
Information about American International Petroleum Corporation
Through our wholly owned subsidiaries, we:
o Produce, process and market conventional and technologically advanced
polymer asphalt, vacuum gas, oil and other products at our refinery in
Lake Charles, Louisiana utilizing low-cost, low-gravity, high sulphur
crudes.
o Blend and market asphalt to the Florida and Georgia asphalt markets
utilizing our refinery in St. Marks, Florida as a distribution
facility.
o Engage in oil and gas exploration and development in western
Kazakstan, where we own a 70% working interest in a 20,000 square
kilometer exploration block and a 100% working interest in a 200,000
acre gas field.
We also are seeking other oil and gas projects in the United States, Russia and
Central Asia.
Where You Can Find More Information
We file reports, proxy statements and other information with the SEC. You may
read and copy any document we file at the Public Reference Room of the SEC at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Regional Offices of the SEC at Seven World Trade Center, Suite 1300, New York,
New York 10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Please call 1-800-SEC-0330 for further information concerning the
Public Reference Room. Our filings also are available to the public from the
SEC's website at www.sec.gov. We distribute to our stockholders annual reports
containing audited financial statements.
Information Incorporated By Reference
The SEC allows us to "incorporate by reference" the information we file with it,
which means that we can disclose important information to you by referring to
those documents. The information incorporated by reference is considered to be
part of this prospectus, and information we file later with the SEC will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act until the
offering is completed:
1. Annual Report on Form 10-K for the fiscal year ended December 31,
1998, including any amendment to that report.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999,
June 30, 1999, and September 30, 1999, including any amendments to
those reports.
3. Proxy Statement dated June 15, 1999.
4. Current Reports on Form 8-K dated March 1, 1999 and September 9, 1999,
including any amendment to those reports.
5. The description of the common stock contained in our Registration
Statement on Form 8-A (File No. 0-14905) under Section 12 of the
Securities Exchange Act, including any amendment or report updating
that description.
12
<PAGE>
You may request a copy of these filings, at no cost, by writing or calling us
at:
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
444 Madison Avenue
New York, New York 10022
Attention: Corporate Secretary
Telephone: (212) 688-3333
Legal Matters
The validity of the shares of common stock offered by the prospectus has been
passed upon by Snow Becker Krauss P.C., 605 Third Avenue, New York, New York
10158. Snow Becker Krauss P.C. and an affiliated investment partnership hold
473,723 shares of common stock, all of which were issued for legal fees and
disbursements.
Experts
The financial statements incorporated in this prospectus by reference to our
Annual Report on Form 10-K/A for the year ended December 31, 1998, have been so
incorporated in reliance upon the report (which contains an explanatory
paragraph relating to our ability to continue as a going concern as described in
Note 2 to the financial statements) of Hein + Associates LLP, independent
certified public accountants, given upon the authority of said firm as experts
in accounting and auditing for the years ended December 31, 1996, 1997 and 1998.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses which will be paid by
the Registrant in connection with the issuance and distribution of the shares of
Common Stock being registered hereby:
Securities and Exchange Commission registration fee ........... $ 974.71
Legal fees and expenses ....................................... 5,000.00
Listing fees .................................................. 17,500.00
Accounting fees ............................................... 1,000.00
Miscellaneous ................................................. 2,525.29
-------------
Total ....................................... $ 27,000.00
=============
Item 15. Indemnification of Directors and Officers
Under Section 78.751 of the Nevada Corporation Law ("NCL"), directors and
officers may be indemnified against judgments, fines and amounts paid in
settlement and reasonable expenses (including attorneys' fees), actually and
reasonably incurred as a result of specified actions or proceedings (including
appeals), whether civil or criminal (other than an action by or in the right of
the corporation - a "derivative action") if they acted in good faith and for a
purpose which they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful. A
similar standard of care is applicable in the case of derivative actions, except
that indemnification only extends to amounts paid in settlement and reasonable
expenses (including attorneys' fees) actually and reasonably incurred by them in
connection with the defense or settlement of such an action (including appeals),
except in respect of a claim, issue or matter as to which such person shall have
been finally adjudged to be liable to the corporation, unless and only to the
extent a court of competent jurisdiction deems proper.
In accordance with Section 78.037(1) of the NCL, Article VIII of the
Registrant's Certificate of Incorporation, as amended, eliminates the personal
liability of the Registrant's directors to the Registrant or its shareholders
for monetary damages for breach of their fiduciary duties as directors, with
certain limited exceptions set forth in said Article VIII and Section 78.037(1).
Article VII of the Registrant's Bylaws provides for indemnification of
directors, officers and others as follows:
"On the terms, to the extent, and subject to the condition prescribed by statute
and by such rules and regulations, not inconsistent with statute, as the Board
of Directors may in its discretion impose in general or particular cases or
classes of cases, (a) the Corporation shall indemnify any person made, or
threatened to be made, a party to an action or proceeding, civil or criminal,
including an action by or in the right of any other corporation of any type or
kind, domestic or foreign, or any partnership, joint venture, trust, employee
benefit plan or other enterprise which any director or officer of the
Corporation served in any capacity at the request of the Corporation, by reason
of the fact that he, his testator or intestate, was a director or officer of the
joint venture, trust, employee benefit plan or other enterprise in any capacity,
against judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees of any such action or proceeding, or any appeal
therein, and (b) the Corporation may pay, in advance of final disposition of any
such action or proceeding, expenses incurred by such person in defending such
action or proceeding. On the terms, to the extent, and subject to the conditions
prescribed by statute and by such rules and regulations, not inconsistent with
statute, as the Board of Directors may in its
14
<PAGE>
discretion impose in general or particular cases or classes of cases, (a) the
Corporation shall indemnify any person made a party to an action by or in the
right of the Corporation to procure a judgment in its favor, by reason of the
fact that he, his testator or intestate, is or was a director or officer of the
Corporation, against the reasonable expenses, including attorneys' fees,
actually and necessarily incurred by him in connection with the defense of such
action, or in connection with an appeal therein, and (b) the Corporation may
pay, in advance of final disposition of any such action, expenses incurred by
such person in defending such action or proceeding."
The Registrant maintains insurance, at its expense, to reimburse itself and
directors and officers of the Registrant and of its direct and indirect
subsidiaries against any expense, liability or loss arising out of
indemnification claims against directors and officers and to the extent
otherwise permitted under the NCL.
Section 2.7(a) of the Registration Rights Agreement among the Registrant and the
Selling Securityholders provides for indemnification by the Registrant of the
Selling Securityholders, any underwriters who participate in the distribution of
the Shares of Common Stock offered hereby on behalf of the Selling
Securityholders, the directors, officers and any persons who control the Selling
Securityholders against certain liabilities under the Securities Act. In
addition, Section 2.7(b) of the Registration Rights Agreement provides that, at
the request of the Registrant, the Selling Securityholders will indemnify the
Registrant and its directors, officers and any persons who control the
Registrant against certain liabilities under the Securities Act (the "Securities
Act").
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
<TABLE>
<CAPTION>
Item 16. Exhibits
<S> <C>
4.1* Form of Secured Debenture Purchase Agreement dated as of August 19, 1999.
4.2* Form of 6% Secured Convertible Debenture (included as Exhibit A to Exhibit 4.1).
4.3* Form of Registration Rights Agreement (included as Exhibit C to Exhibit 4.1).
4.4* Form of Security Agreement (included as Exhibit D to Exhibit 4.1).
4.5* Form of common Stock Purchase Warrant (included as Exhibit E to Exhibit 4.1).
5.1 Opinion of Snow Becker Krauss P.C.
23.1 Consent of Snow Becker Krauss P.C. (contained in Exhibit 5.1).
23.2 Consent of Hein + Associated LLP.
24.1 Power of Attorney (included on the signature page of this
Registration Statement)
</TABLE>
- ----------
* Incorporated by reference from the Registrant's Current Report on Form 8-K
dated September 9, 1999.
15
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes that it will:
(a)(l) File, during any period in which it offers or sells the securities
offered hereby, a post-effective amendment to this registration statement
to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act.
(ii) Reflect in the prospectus any facts or events which, individually
or in the aggregate, represents a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(iii) 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.
(2) For determining any liability under the Securities Act, 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.
(3) Remove from registration by means of a post-effective amendment any of
the securities being registered that remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement 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) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or controlling
persons of the Registrant pursuant to any arrangement, provision or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful
16
<PAGE>
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant 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 Securities Act and will be
governed by the final adjudication of such issue.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on December 3, 1999.
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
By: /s/ Denis J. Fitzpatrick By: /s/Joe Michael McKinney
------------------------- -----------------------
Denis J. Fitzpatrick Joe Michael McKinney
Vice President, Chief Financial Officer Chief Executive Officer and
and Secretary (principal financial Director (principal executive
and accounting officer) officer)
POWER OF ATTORNEY
Each of the undersigned hereby authorizes George N. Faris and/or Denis J.
Fitzpatrick as his attorneys-in-fact to execute in the names of each such person
and to file such amendments (including post-effective amendments) to this
registration statement as the Registrant deems appropriate and appoints such
persons as attorneys-in-fact to sign on his behalf individually and in each
capacity stated below and to file all amendments, exhibits, supplements and
post-effective amendments to this registration statement.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons on December 3, 1999 in the
capacities stated.
Signature
/s/ Joe Michael McKinney
- ------------------------
Joe Michael McKinney
Chief Executive Officer
and Director (principal
executive officer)
/s/ Denis J. Fitzpatrick
- ------------------------
Denis J. Fitzpatrick
Vice President, Chief Financial Officer and
Secretary (principal financial and accounting officer)
/s/ George N. Faris
- ------------------------
George N. Faris
Chairman of the Board of Directors
/s/ Donald G. Rynne
- ------------------------
Donald G. Rynne
Director
/s/ Daniel Y. Kim
- ------------------------
Daniel Y. Kim
Director
/s/ William R. Smart
- ------------------------
William R. Smart
Director
18
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
4.1* Form of Secured Convertible Debentures Purchase Agreement dated as of
August 19, 1999.
4.2* Form of 6% Secured Convertible Debenture (included as Exhibit A to
Exhibit 4.1).
4.3* Form of Registration Rights Agreement (included as Exhibit C to Exhibit
4.1)
4.4* Form of Security Agreement (included as Exhibit D to Exhibit 4.1)
4.5* Form of Common Stock Purchase Warrant.
5.1 Opinion of Snow Becker Krauss P.C.
23.1 Consent of Snow Becker Krauss P.C. (contained in Exhibit 5.1).
23.2 Consent of Hein + Associates LLP.
24.1 Powers of Attorney (included on the signature page of this Registration
Statement)
- ----------
* Incorporated by reference from the Registrant's Current Report on Form
8-K dated September 9, 1999.
19
Exhibit 5.1
SNOW BECKER KRAUSS P.C.
605 Third Avenue
New York, NY 10158
Phone: (212) 687-3860
Fax: (212) 949-7052
December 3, 1999
American International Petroleum Corporation
444 Madison Avenue
New York, New York 10022
Ladies and Gentlemen:
We are counsel to American International Petroleum Corporation, a Nevada
corporation (the "Company"), in connection with the filing by the Company with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
as amended (the "Securities Act"), of a registration statement on Form S-3 (the
"Registration Statement") relating to the offer and sale of 7,459,933 shares of
the Company's common stock by the selling securityholders named in the
Registration Statement, including.
o 6,434,933 shares that they may acquire upon conversion of, or in
payment of accrued interest on, the Company's 6% secured convertible
debentures due November 2, 2004.
o 1,025,000 shares that they may acquire upon exercise of outstanding
warrants.
We have examined such records and documents and made such examinations of law as
we have deemed relevant in connection with this opinion. Based upon the
foregoing, it is our opinion that:
1. The Company has been duly organized is validly existing and in
good standing under the laws of the State of Nevada
2. The Shares have been duly authorized, and when issued upon
conversion of the convertible debentures in accordance with the
terms thereof or, upon payment of the exercise price specified in
the warrants, as the case may be, will be legally issued, fully
paid and nonassessable.
Our firm owns 247,818 shares of Common Stock, and an investment nominee of our
firm owns 225,905 shares of Common Stock.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption Legal
Matters in the Registration Statement. In so doing, we do not admit that we are
in the category of persons whose consent is required under Section 7 of the Act
or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ Snow Becker Krauss P.C.
---------------------------
SNOW BECKER KRAUSS P.C.
20
Exhibit 23.2
Independent Auditors Consent
The Board of Directors
American International Petroleum Corporation
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3, and the accompanying Prospectus, of our report dated
March 30, 1999, appearing on page F-1 of American International Petroleum
Corporation's Annual Report on Form 10-K/A for the year ended December 31, 1998.
We also consent to the reference to us under the heading "Experts" in the
Prospectus filed herewith.
/s/ HEIN + ASSOCIATES LLP
-------------------------
HEIN + ASSOCIATED LLP
Houston, Texas
December 1, 1999
21
