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7-Jul-2007 UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549___________________________________ FORM 8-KCurrent Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934Date of Report (Date of earliest event reported): July 5, 2007 AMERICAN ENERGY PRODUCTION, INC.(Exact name of registrant as specified in its charter)
Delaware 333-52812 74-2945581 (State or other jurisdiction (Commission File Number) (I.R.S. Employer Identification No.)
6073 Hwy 281 South Mineral Wells, TX 76067 (Address of principal executive offices and zip code) Registrant’s telephone number, including area code: (210) 410-8158 Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition Item 7.01. Regulation FD Disclosure Item 9.01. Financial Statements and Exhibits SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. American Energy Production, Inc. By /s/ Charles Bitters___________ Charles Bitters Chief Executive Officer July 5, 2007 (Date) EXHIBIT 99.1 July 5, 2007 An Open Letter to the Shareholder’s of American Energy Production, Inc. Dear Shareholders: Since December of 2002, American Energy Production, Inc. (“AMEP”) and or the “Company” has issued approximately 452,000,000 shares of common stock and raised approximately $7,400,000 in capital. The capital has been utilized to fund operations, acquire equipment and obtain oil and gas leases. As a result, the market capitalization of AMEP as of July 3, 2007 is approximately $18,000,000. As disclosed in recent public filings, AMEP has successfully transferred from being a Business Development Company with portfolio companies to an oil and gas operating company with consolidated wholly-owned subsidiaries. However, AMEP has no ability to obtain additional capital to carry out its business plan and requires a restructuring of its common stock. Accordingly and after careful consideration, the Board of Directors has recommended a one-for-twenty five Reverse Stock Split of the common stock of the Company. The Company has provided a detailed question and answer format in the attached Proxy Statement but in summary, believes that this action potentially will:
Based on initial shareholder response received by the Company, there are three primary issues among shareholders that appear to be significant.
The Board of Directors selected the ratio taking into account a number of factors including:
The Board of Directors believes that retaining the authorized shares of common stock at 500,000,000 will provide the Company with the ability to timely raise capital, timely complete future acquisitions and mergers and attract and retain key executives and employees. The requirement for the Company to request shareholder approval for issuances of common stock is not practical, could impede opportunities due to timing and would be costly to the Company in relation to both currency and employee time inefficiency.
First, the Preferred Stock agreement with Mr. Bitters specifies that in the event of a restructuring of the AMEP shareholders equity, the Preferred Stock is not subject to any adjustment. In 2002, Mr. Bitters loaned the Company $464,005 of funds and the Company had no ability to repay these funds. Additionally, as of January 4, 2004, accrued interest of $64,527 was owed to Mr. Bitters by the Company and the Company had no ability to repay the interest. As a result, on January 5, 2004, the Board of Directors approved the issuance of 3,500,000 designated Series A preferred stock to Mr. Bitters in exchange for the conversion of $464,005 of indebtedness owed to him. In connection with the conversion of the note principal, Mr. Bitters forgave the related accrued interest totaling $64,527 in a separate transaction on the same date. The Preferred Stock has right to convert into common stock at a ration of three (3) shares of Common Stock to one (1) share of Preferred Stock. Assuming that Mr. Bitters would elect to convert, the total shares of common stock issued would be 10,500,000. Based upon a purchase price of $464,005 (excluding $64,527 of interest forgiven), the 10,500,000 shares would represent a purchase price of common stock $0.044 per share. As a comparison, when the Preferred Stock was granted to Mr. Bitters, AMEP was selling common stock to investors at $0.01 per share.
The Company encourages each of its shareholders to read the attached Proxy Statement including the Question and Answer section as you evaluate the proposal and the Board of Directors recommends a yes vote for the proposal. Thank You American Energy Production, Inc.
About: American Energy Production, Inc. American Energy Production Inc. is a Business Development Company. A BDC company is regulated under the 1940 SEC act. That act set out procedures by which a Company once it establishes a majority position in a Company can make a series of further investments in its 'investee.' A BDC company does not consolidate financial statements with its investees and each investee operates independently. The value of a BDC is derived by adding the value of each of the investees. In the case of AMEP each investee's oil and gas leases and producing properties and equipment will be evaluated by a petroleum engineer and then the independent members of the Board of Directors of AMEP will use this information along with other relevant facts and arrive at a value of each investee and the complete BDC. Statements contained in this release, which are not historical facts, may be considered "forward-looking statements" and are based on current expectations and the current economic environment. We caution the reader that such forward-looking statements are not guarantees of future performance. Unknown risk, uncertainties, as well as other uncontrollable or unknown factors could cause actual results to materially differ from the result, performance, or expectations expressed or implied by such forward-looking statements. Contact: American Energy Production Inc. Source: Oil America Group Corporation
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