Delta Seaboard International, Inc. and AMERICAN INTERNATIONAL INDUSTRIES, INC.
ANNOUNCE THE SALE OF Delta Seaboard Well Service, Inc.
Houston & Kemah, Texas – April 9, 2012Delta Seaboard International, Inc. (OTCBB: HMDI) ("Delta") and American International Industries, Inc. (OTCBB: AMIN) ("American") today announced the sale of Delta’s wholly-owned subsidiary, Delta Seaboard Well Service, Inc. ("DSWS"), to Delta Seaboard LLC, ("Delta LLC") an entity controlled by Robert Derrick, Jr. and Ron Burleigh, Delta's President and Vice President, respectively. The total consideration paid to Delta and American is $4,075,000, represented by $1.6 million in cash, $1.4 million evidenced by a 5 year, 5% secured and guaranteed promissory note (the "Note") payable to Delta and the delivery to American of 31,925,832 shares of Delta common stock valued at $1.075 million which shares represent 45% of Delta’s outstanding shares at December 31, 2011.
Notwithstanding its 5 year term, the Note will be paid prior to maturity, upon the sale of 3.2 acres of land on which DSWS’ place of business is located. The divestiture of DSWS, which was approved by the Joint Consent of the Board of Directors and Majority Stockholders of Delta, will increase American's ownership interest in Delta from approximately 45% to 91.4%. At December 31, 2011, DSWS had a net book value of $2.6 million; the sale of DSWS resulted in a gain to Delta of approximately $1.4 million and to American of approximately $1.2 million. The exact amount of the gain will be subject to adjustment based upon the actual book value at the date of closing, which took place on April 3, 2012.
Delta will receive additional consideration equal to the amount that Delta LLC receives from the planned sale of the 3.2 acre property in excess of $3 million. This property is currently being offered for sale for $4.25 million, which both Delta and American believe is the fair market value of the property.
DSWS has been in the oil and gas service business for over thirty years. Daniel Dror, Chairman and CEO, stated that "the decision by the board of directors of Delta and American to sell DSWS was to substantially increase its cash position, to repurchase its shares on the open market since the company’s liquidity is more than its market cap and to be able to explore several investment opportunities that exist utilizing the proceeds from this transaction, which we believe will be in the best interests of the shareholders of Delta and American."
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American International Industries, Inc. is a diversified holding company of subsidiaries with interests in the automotive and consumer retail industry, real estate, oil well site supply and services, intellectual property, and the acquisition of petroleum resources in the United States, coupled with international exploration. The vision of the Company is to expand its interests in the energy sector through the acquisition of existing businesses, and apply its financial resources and management expertise to improve each subsidiary’s revenues, operations and profitability.
This press release may contain forward-looking statements, including information about management’s view of the Company’s future expectations, plans and prospects, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "believes," "expects," "intends," "plans," "anticipates," or "may," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act, and are subject to the safe harbor created by the Act. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. Factors that could cause actual results to differ materially from those that we may anticipate in each of our segments reflected by our subsidiaries' operations include, among others:, continued value of our real estate portfolio; the strength of the real estate market in Houston, Texas as a whole; the ability to expand its interests in the energy sector; increased levels of competition; the dependence upon financing, the rules of regulatory authorities and risks associated with any potential acquisitions. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of the Company, its divisions and concepts to be materially different than those expressed or implied in such statements. These risk factors and others are included from time to time in documents the Company files with the Securities and Exchange Commission, including but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks. Other unknown or unpredictable factors also could have material adverse effects on the Company’s future results. The forward-looking statements included in this press release are made only as of the date hereof. The Company cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, the Company undertakes no obligation to update these statements after the date of this release, except as required by law, and also takes no obligation to update or correct information prepared by third parties that are not paid for by the Company.
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