<PAGE>
As filed with the Securities and Exchange Commission on September 10, 1999
Registration No. 333-
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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 Avenue
New York, New York 10022
(212) 688-3333
(Address and telephone number of
registrant's principal executive offices)
DR. GEORGE N. FARIS
Chief Executive Officer
AMERICAN INTERNATIONAL PETROLEUM CORPORATION
444 Madison Avenue
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. [ ]
---------------------
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.
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<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Proposed Maximum
Class Aggregate Proposed Amount of
of Securities Amount to be Offering Price Maximum Registration
to be Registered Registered Per Security(1) Offering Price Fee
- ------------------------ ---------------- ------------------ ---------------- ------------------
<S> <C> <C> <C> <C>
Common Stock
$.08 par value ......... 11,509,006 $ 0.75(3) $8,631,755 $2,399.63
</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 10,526,506 shares that may be acquired upon conversion of, or in
payment of accrued interest, the Registrant's 6% secured convertible
debentures due August 19, 2004
o 712,500 shares that may be acquired upon exercise of outstanding
warrants
o 270,000 shares previously acquired
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 September 8, 1999.
<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 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 SEPTEMBER 10, 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 August 19, 2004
o 712,500 shares of our common stock that they may acquire upon exercise
of outstanding warrants
o 270,000 shares of our common stock that they have previously acquired
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 __________, 1999
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
-----
<S> <C>
Risk Factors ............................................................ 3
Forward Looking Statements .............................................. 8
Selling Securityholders ................................................. 8
Plan of Distribution .................................................... 10
Information About American International Petroleum Corporation .......... 11
Where You Can Find More Information ..................................... 11
Information Incorporated By Reference ................................... 12
Legal Matters ........................................................... 12
Experts ................................................................. 12
</TABLE>
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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.
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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 $7.1 million for the six months ended June 30, 1999 as compared
to a net loss of approximately $2.1 million for the six months ended June 30,
1998. As a result of these losses, as of June 30, 1999, we had an accumulated
deficit of approximately $95 million. We will continue to incur losses until our
asphalt refinery operations or Kazakstan licensing activities 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 refinery 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. 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
3
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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
and drilling and production operations. 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
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.
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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.
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.
5
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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, and
unanticipated expenses for refinery repairs and transportation fees.
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
Chief Executive Officer, Dr. George N. Faris, as well as other key management
personnel. Dr. Faris is employed pursuant to an employment agreement which
renews automatically each year until written notice of termination is given by
either Dr. Faris or us not later than 180 days prior to May 1 of any renewal
term. We also maintain a $2,000,000 key man life insurance policy on the life
of Dr. Faris. 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 April 15, 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 business days. Under Nasdaq rules, we were able to
achieve compliance with the minimum bid price requirement for continued listing
on Nasdaq since the closing price of a share of our common stock was at least
$1.00 for at least ten consecutive business days during the following 90 day
period. By letter dated June 1, 1999, Nasdaq advised us that we had demonstrated
compliance with the minimum bid price requirement. We may not be able to
continue to satisfy the requirements for the continued listing of our common
stock on Nasdaq. The bid price of our common stock has been less than $1.00
since August 18, 1999. If we are unable to satisfy Nasdaq's maintenance
requirements, our common stock may be delisted. 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 NASD'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 August 19, 1999, there were 75,732,239 shares of common stock
outstanding, of which 63,379,780 shares are transferable without restriction
under the Securities Act. The remaining 12,352,459 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.
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o 918,810 shares may be acquired upon conversion of, and upon payment of
accrued interest on, our 14% convertible notes, based upon an assumed
conversion price of $0.6906 per share, the conversion price in effect on
September 3, 1999. The actual conversion price is 85% of the lowest five
consecutive daily weighted average sales price of the common stock on the
Nasdaq National Market for the 40-day trading period prior to the date of
conversion. 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 14,842,166 shares may be acquired upon conversion of, and upon payment of
accrued interest on, our 5% convertible debenture, at an assumed
conversion price of $0.6906 per share, the conversion price in effect on
September 3, 1999. 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 7,084,419 shares may be acquired upon conversion of, and upon payment of
six months accrued interest on, our 6% secured convertible debentures due
August 19, 2004, based upon an assumed conversion price of $0.6906 per
share, the conversion price in effect on September 3, 1999. 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 8,911,296 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 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.
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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 August 19, 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 8,066,919 shares of common
stock by this prospectus, including
o up to 7,084,419 shares that they may acquire upon conversion of, and
in payment of six months accrued interest on, our 6% convertible
debentures, at an assumed conversion price of $0.6906 per share, the
conversion price in effect on September 3, 1999. 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 10,526,506 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, 10,317,115 shares represent
150% of the 6,878,077 shares that the selling securityholders may
acquire upon conversion of the convertible debentures at the assumed
conversion price of $0.6906, and 209,391 shares represent payment of
six months accrued interest on the convertible debentures at the
assumed conversion price. As each of these selling securityholders
resells shares of common stock under this prospectus, we will file
prospectus supplements as necessary to update the number of shares of
common stock that each selling securityholder intends to sell,
reflecting prior resales and changes in the conversion price.
o 712,500 shares that they may acquire upon exercise of warrants.
o 270,000 shares previously acquired
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:
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 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 are convertible into common stock commencing
upon the earliest of
1. November 17, 1999
2. The date upon which this registration statement is declared
effective by the SEC
3. After the closing bid price of a share of common stock has been at
least $2.50 commencing August 19, 1999.
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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 August 19, 1999, we had 75,732,239 shares of common stock
outstanding. For purposes of computing the number and percentage of shares
beneficially owned by each selling securityholder as of August 19, 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.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
of Common Stock Before Shares of Common of Common Stock
Offering(1) Stock Offered After Offering
Name of Selling ----------------------------------- ------------------ ---------------------------
Securityholder Number Percent Number Percent
- ------------------------------------ ------------------ -------------- ---------------- --------
<S> <C> <C> <C> <C> <C>
Holders of convertible debentures
and warrants:
Mount Albion LLC 6,565,751(2)(3) 8.0% 6,565,751(2)(3) 0 --
c/o CITCO Fund Services
Bahamas Financial Center 3rd Fl.
Shirley & Charlotte Streets
CB13136 Nassau, Bahamas
AMRO International S.A. 1,231,167(2)(4) 1.6% 1,231,1672(2)(4) 0 --
c/o Ultra Finanz
Grossmunster Platz
Zurich CH8022 Switzerland
Holders of shares:
Sargeant Marine, Inc. 895,000 1.2% 70,000 825,000 1.1%
3020 Military Trail, Suite 100
Boca Raton, Florida 33431
Andrew Reckles 110,000(5) * 90,000 0 --
3565 Piedmont Rd. Ste 300
Atlanta, GA 30302
Paul Mannion Jr. 110,000(5) * 90,000 0 --
3565 Piedmont Rd. Ste 300
Atlanta, GA 30302
JW Genesis Securities Inc. (6) 20,000 * 20,000 0 --
3565 Piedmont Rd. Ste 300
Atlanta, GA 30302
</TABLE>
- ------------
* Less than one percent (1%).
(1) The information presented in the table does not give effect to the terms of
the convertible debentures and the 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.
(2) 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 $0.6906 per share, the conversion price in effect on September 3,
1999. 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.
(3) Includes 599,925 shares that may be acquired upon exercise of warrants.
(4) Includes 112,575 shares that may be acquired upon exercise of warrants.
(5) Includes 20,000 shares registered in the name of J.W. Genesis Securities
Inc. as to which Mssrs. Reckles and Mannion Jr. have shared voting and
dispositive power.
(6) Andrew Reckles, Per Hvid, Paul Mannion Jr., and Vincent Sbarra are the
principals of J.W. Genesis Securities Inc.
9
<PAGE>
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
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.
10
<PAGE>
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 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.
11
<PAGE>
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 and
June 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.
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 547,723 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.
12
<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 ......... $ 2,399.63
Legal fees and expenses ..................................... 5,000.00
Listing fees ................................................ 17,500.00
Accounting fees ............................................. 1,000.00
Printing .................................................... 3,000.00
Miscellaneous ............................................... 1,100.37
-----------
Total .................................................... $30,000.00
===========
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 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."
II-1
<PAGE>
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.
Insofar as indemnification for liabilities arising under the Securities
Act 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>
<S> <C>
Item 16. Exhibits
4.1* Form of Secured Convertible 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 + Associates 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.
II-2
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes that it will:
(a) (1) 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, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act) 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 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.
II-3
<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 September 9, 1999.
American International Petroleum Corporation
By: /s/ George N. Faris By: /s/ Denis J. Fitzpatrick
----------------------- ----------------------------
Dr. George N. Faris Denis J. Fitzpatrick
Chief Executive Officer Chief Financial Officer
(principal executive officer) (principal financial and
accounting 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 September 9,
1999 in the capacities stated.
Signature Title
- ------------------------ ------------------------------------------------------
/s/ George N. Faris Chief Executive Officer and Chairman of the
- ------------------------ Board of Directors (principal executive officer)
George N. Faris
/s/ Denis J. Fitzpatrick Vice President, Chief Financial Officer and Secretary
- ------------------------ (principal financial and accounting officer)
Denis J. Fitzpatrick
Director
- ------------------------
Donald G. Rynne
/s/ Daniel Y. Kim Director
- ------------------------
Daniel Y. Kim
Director
- ------------------------
William R. Smart
/s/ Richard Murphy Director
- ------------------------
Richard Murphy
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C>
Item 16. Exhibits
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 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.
II-5
<PAGE>
EXHIBIT 5.1
September 9, 1999
American International Petroleum Corporation
444 Madison Avenue
New York, New York 10022
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 11,509,006 shares of
the Company's common stock by the selling securityholders named in the
Registration Statement, including
o 10,526,506 shares that they may acquire upon conversion of, or in
payment of accrued interest on, the Company's 6% secured convertible
debentures due August 19, 2004,
o 712,500 shares that they may acquire upon exercise of outstanding
warrants
o 270,000 shares previously acquired.
We have examined such corporate documents and records and other certificates,
and we have made such investigations of law as we have deemed necessary or
appropriate in order to render the opinions hereinafter set forth. Based on the
foregoing, we are of the 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 of common stock to be issued upon conversion
of the convertible debentures, or in payment of accrued
interest on the convertible debentures, have been duly
authorized, and when issued upon conversion of the
convertible debentures, or in payment of accrued interest
on the convertible debentures, in accordance with the terms
of the convertible debentures, will be legally issued,
fully paid and non-assessable.
3. The shares of common stock to be issued upon the exercise
of the warrants have been duly authorized, and when paid
for and issued in accordance with the terms of the
warrants, thereof, will be legally issued, fully paid and
non-assessable.
Our firm owns 321,818 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 in the Registration Statement to
this firm under the heading "Legal Matters." In giving this consent, we do not
hereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act, or the rules and regulations of
the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Snow Becker Krauss P.C.
-----------------------------
SNOW BECKER KRAUSS P.C.
<PAGE>
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 + ASSOCIATES LLP
Houston, Texas
August 31, 1999
