Mail Stop 7010
November 17, 2005
Via U.S. mail and facsimile
Mr. Daniel Dror
President and Chief Executive Officer, American International
Industries, Inc.
601 Cien Street, Suite 235
Kemah, TX 77565-3077
RE: Form 10-KSB for the fiscal year ended December 31, 2004
Forms 10-QSB for the periods ended March 31, 2005, June 30, 2005,
and
September 30, 2005
File No. 0-25223
Dear Mr. Dror:
We have reviewed your response to our comment letter
dated
September 26, 2005 and have the following comments. If you
disagree
with a comment, we will consider your explanation as to why our
comment is inapplicable or a revision is unnecessary. Please be
as
detailed as necessary in your explanation. In some of our
comments,
we may ask you to provide us with supplemental information so we
may
better understand your disclosure. After reviewing this
information,
we may or may not raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2004
Real Estate Business
1. Please expand your disclosures to clarify the company`s real
estate investment policy. To appropriately convey to readers the
nature of your current business, please move the Real Estate
Business
discussion (in your Description of Business) from within your
discussion of the operations of your wholly-owned and majority-
owned
subsidiaries. We believe the discussion of your real estate
activities should be separately discussed after your discussion of
the ongoing operations of your industrial/commercial segment
related
to you automotive after-market products and your oil and gas
segment
related to Delta Seaboard Well Services, Inc. In this regard, we
believe you should revise your Note 17 - Segment Information to
clarify that you only have two reportable segments.
Item 8A. Controls and Procedures
2. Given the fact that you restated your financial statements,
please
tell us how you were able to conclude that disclosure controls and
procedures are effective in accordance with Item 307 of Regulation
S-
K in your Form 10-KSB/A#2 for the fiscal year ended December 31,
2004
and your Forms 10-QSB for the fiscal quarters ended March 31, 2005
and June 30, 2005.
Report of Independent Registered Public Accounting Firm
3. The report should be dual dated with regard to Note 19. Please
also indicate on the report whether it has been signed by your
auditors.
Balance Sheet
4. Given your real estate investment policy, you should refrain
from
using the term "inventory of real estate" in your balance sheet
and
throughout your filing as inventory suggests that buying and
selling
real estate is part of your principal business operations.
Statement of Cash Flows
5. We note that the inventory of real estate acquired for resale
is
included in cash flows for operating activities while the proceeds
from the sale of real estate acquired for resale is included in
cash
flows from investment activities. Given your real estate
investment
policy, please reclassify the inventory of real estate acquired
for
resale of $(2,937,046) to cash flows from investing activity.
6. As previously requested, the note that you received upon the
sale
of real estate should be reflected as a non-cash transaction in
the
supplemental schedule of cash flow information.
Note 2 - Acquisitions and Divestitures
Har-Whit`s/Pitt`s & Spitt`s
7. We note your response to comment 10. Please clarify in Note 2,
as
you did in your response, that although there is a significant
balloon payment on the notes receivable in 2007, you recognized a
gain on the machinery and equipment and trademark due to the
credit
worthiness of the buyer. Please also clarify whether you assess
the
note receivable for impairment as of each reporting date.
Note 16 - Related Party Transactions
8. We note your response to comment 12, however it appears to be
incomplete. In this regard, we repeat the comment below. In your
response, please tell us where in the filing we can find the
information we requested.
We note your response to our comment 9 of the letter dated July
14,
2005. However, Note 14 appears to be the same as your prior Note
12
except in a different format. In this regard, please provide a
note
(or expand Note 14) to summarize the transactions that resulted in
charges in you accounts receivable and loans payable to your
related
party amounts and address the disclosure requirements of SFAS 57,
paragraph 2. In other words, describe the transactions that
resulted
in the changes to the line items accounts receivable from related
parties and short-term loans to related parties on your balance
sheet.
FORMS 10-QSB FOR THE PERIODS ENDED MARCH 31, 2005, JUNE 30, 2005,
AND
SEPTEMBER 30, 2005
General
9. Please address the comments above in your interim filings as
well.
* * * *
Please respond to these comments within 10 business
days,
or tell us when you will provide us with a response. Please
provide
us with a supplemental response letter that keys your responses to
our comments and provides any requested supplemental information.
Detailed letters greatly facilitate our review. Please file your
supplemental response on EDGAR as a correspondence file. Please
understand that we may have additional comments after reviewing
your
responses to our comments.
If you have any questions regarding these comments, please
direct them to Marie Trimeloni, Staff Accountant, at (202) 551-
3734
or, in her absence, to Jeanne Baker, Assistant Chief Accountant at
(202) 551-3691.
Sincerely,
Rufus Decker
Accounting Branch Chief
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Mr. Daniel Dror
November 17, 2005
Page 3 of 3
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE