UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30~~March 31, ~~2014~~2015

¨☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File No.: 1-33640

AMERICAN INTERNATIONAL INDUSTRIES, INC.

(Exact Name Of Registrant As Specified In Its Charter)

Nevada		88-0326480
(State of Incorporation)		(I.R.S. Employer Identification No.)

601 Cien Street, Suite 235, Kemah, TX		77565-3077
(Address of Principal Executive Offices)		(ZIP Code)

Registrant's Telephone Number, Including Area Code: (281) 334-9479

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x ☒ No ¨ ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x ☒ No ¨ ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer, "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨☐ Accelerated filer ¨☐ Non-accelerated filer ¨☐ Smaller reporting company x☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ ☐ No x ☒

The number of shares outstanding of each of the issuer’s classes of equity as of ~~November~~July 1927, ~~2014~~ 2015 is 2,~~410~~196,~~948~~ 517 shares of common stock and 1,000 shares of preferred stock.

TABLE OF CONTENTS

Item	Description	Page
	PART I – FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET ~~RISK~~RISKS	2425
ITEM 4T.	CONTROLS AND PROCEDURES	2425
	PART II – OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	2425
ITEM 1A.	RISK FACTORS	2425
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2425
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	2425
ITEM 4.	MINE SAFETY DISCLOSURES	2425
ITEM 5.	OTHER INFORMATION	2425
ITEM 6.	EXHIBITS	2425

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Financial Statements

Financial Statements
Unaudited Consolidated Balance Sheets – September 30, 2014 and December 31, 2013	4
Unaudited Consolidated Balance Sheets – March 31, 2015 and December 31, 2014		4
Unaudited Consolidated Statements of Operations and Comprehensive Loss – Three and Nine Months Ended September 30, 2014 and 2013	5
Unaudited Consolidated Statements of Operations and Comprehensive Loss – Three Months Ended March 31, 2015 and 2014		5
Unaudited Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2014 and 2013	6
Unaudited Consolidated Statements of Cash Flows – Three Months Ended March 31, 2015 and 2014		6
Notes to Unaudited Consolidated Financial Statements	7	7

AMERICAN INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

		September 30, 2014		December 31, 2013
		March 31, 2015			December 31, 2014
Assets
Current assets:
Cash and cash equivalents	$	~~700,591~~$	$2,292,886	~~715,572~~	$	373,482
Accounts receivable from related parties		1,001		498
Restricted cash			678,867			—
Accounts receivable, net of allowance for doubtful accounts		1,447,133		1,365,460
Other current assets			12,132			8,144
Short-term note receivable		12,000		32,000
Current portion of long-term notes receivable			60,000			2,346,053
Current portion of long-term notes receivable		60,000		42,821
Marketable securities - trading			118,983			—
Inventories, net of reserve for obsolescence		1,614,731		1,495,030
Real estate held for sale			4,751,979			6,413,635
Real estate held for sale		7,211,243		8,421,465
Current assets of discontinued operations			—			2,096,841
Prepaid expenses and other current assets		38,377		32,527
Total current assets			7,914,847			11,238,155
Total current assets		11,085,076		12,105,373
Long-term notes receivable, less current portion			771,028			485,690
Long-term notes receivable, less current portion		2,776,732		814,397
Oil and gas properties, costs subject to amortization			88,059			87,541
Oil and gas properties, costs subject to amortization		90,324		91,573
Oil and gas properties, costs not subject to amortization			91,900			341,900
Oil and gas properties, costs not subject to amortization		341,900		91,900
Property and equipment, net of accumulated depreciation			24,972			25,415
Property and equipment, net of accumulated depreciation		44,275		771,728
Marketable securities – available for sale			5,200			63,250
Goodwill		674,539		674,539
Other assets			4,005			4,005
Patents, trademarks and tooling, net of accumulated amortization		150,062		160,883
Long-term assets of discontinued operations			—			409,194
Marketable securities – available for sale		51,550		8,000
Total assets		$	8,900,011		$	12,655,150
Other assets		4,005		4,005
Liabilities and Equity
Total assets	$	15,218,463	$	14,722,398
Current liabilities:
Liabilities and Equity
Accounts payable and accrued expenses		$	2,039,848		$	1,532,104
Current liabilities:
Accounts payable to related parties			131,124			235,124
Accounts payable and accrued expenses	$	2,093,940	$	1,245,792
Short-term notes payable			—			131,081
Accounts payable to related parties		131,100		133,312
Current portion of long-term debt			18,000			241,902
Short-term notes payable		200,000		200,000
Current liabilities of discontinued operations			—			492,395
Current portion of long-term debt		1,819,468		3,497,808
Total current liabilities			2,188,972			2,632,606
Current portion of long-term debt to related parties		15,000		-
Asset retirement obligations			5,831			5,621
Total current liabilities		4,259,508		5,076,912
Long-term debt, less current portion			358,783			454,286
Accrued pension expense		31,113		36,349
Long-term debt to related party, less current portion			300,000			300,000
Deferred income		464,798		-
Long-term liabilities of discontinued operations			—			2,013,640
Asset retirement obligations		7,719		6,702
Total liabilities			2,853,586			5,406,153
Long-term debt, less current portion		841,182		314,469
Commitments and contingencies
Long-term debt to related parties, less current portion		285,000		-
Equity:
Total liabilities		5,889,320		5,434,432
Preferred stock, $0.001 par value, 1,000,000 shares authorized, 1,000 shares issued and outstanding			1			1
Commitments and contingencies
Common stock, $0.001 par value, 50,000,000 shares authorized;
Equity:
2,226,396 and 2,423,986 shares issued, respectively and 2,221,358 and 2,418,948 shares outstanding, respectively			2,226			2,424
Preferred stock, $0.001 par value, 1,000,000 shares authorized, 1,000 shares issued and outstanding		1		1
Less: treasury stock, at cost; 29,192 and 265,175 shares, respectively			(919,483	)		(1,155,084	)
Common stock, $0.001 par value, 50,000,000 shares authorized;
Additional paid-in capital			38,946,273			39,150,266
2,415,986 and 2,138,986 shares issued, respectively and
Accumulated deficit			(30,539,561	)		(29,396,383	)
2,410,948 and 2,133,948 shares outstanding, respectively		2,416		2,139
Accumulated other comprehensive loss			(1,399,800	)		(1,341,750	)
Less: treasury stock, at cost; 271,953 and 259,393 shares, respectively		(1,229,941)		(1,210,917)
Total equity attributable to American International Industries, Inc.			6,089,656			7,259,474
Additional paid-in capital		39,141,294		38,777,125
Non-controlling interest			(43,231	)		(10,477	)
Accumulated deficit		(27,246,281)		(26,981,161)
Total equity			6,046,425			7,248,997
Accumulated other comprehensive loss		(1,353,450)		(1,397,000)
Total liabilities and equity		$	8,900,011		$	12,655,150
Total equity attributable to American International Industries, Inc.		9,314,039		9,190,187
Non-controlling interest		15,104		97,779
Total equity		9,329,143		9,287,966
Total liabilities and equity	$	15,218,463	$	14,722,398

See accompanying notes to the unaudited consolidated financial statements.

AMERICAN INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

		For the Three Months Ended September 30,					For the Nine Months Ended September 30,
		For the Three Months Ended March 31,
		2014		2013			2014		2013
		2015				2014
Revenues	$	~~2,318,429~~$	$1,575	~~2,695,283~~	$	$	513,~~151,829~~791	$	~~5,230,032~~
Costs and expenses:
Cost of revenues		~~1,921,545~~	3,701	~~2,094,948~~			410,~~041,902~~616		~~3,989,689~~
Selling, general and administrative		1,088,690		736,802			2,879,053		2,843,651
Impairment of oil and gas property			20,000				—
Total costs and expenses		3,010,235		2,831,750			6,920,955		6,833,340
Selling, general and administrative			851,477				415,347
Gain (loss) on sale of assets		1,491,091		-			1,470,012		(38,546)
Total expenses			875,178				425,963
Operating income (loss)		799,285		(136,467)			(299,114)		(1,641,854)
Gain on sale of real estate			971				—
Other income (expenses):
Operating loss			(872,632	)			(412,172	)
Interest and dividend income		18,021		1,561			25,838		52,335
Other income (expenses):
Rubicon lawsuit settlement		-		-			-		7,500
Interest and dividend income			4,299				4,707
Realized gains (losses) on the sale of trading securities, net		~~(90,912)~~	(119,202	~~67,679~~)			~~(41~~12,~~494)~~555		~~200,306~~
Unrealized gains (losses) on trading securities, net		(160,295)		46,615			(213,143)		(41,708)
Unrealized losses on trading securities, net			(174,538	)			(74,182	)
Interest expense		~~(69,736)~~	(22,535	~~(62,160~~)			(~~185~~18,~~030)~~154	)	~~(185,959)~~
Other income		~~14,979~~	8,676	~~20,023~~			~~359,134~~—		~~20,023~~
Total other income (expense)		(287,943)		73,718			54,695		52,497
Total other expense			(303,300	)			(75,074	)
Income (loss) before income tax		511,342		(62,749)			(353,809)		(1,589,357)
Loss before income tax			(1,175,932	)			(487,246	)
Income tax expense (benefit)		2,000		2,835			(6,846)		8,955
Income tax benefit			—				14,629
Net income (loss)		509,342		(65,584)			(346,963)		(1,598,312)
Net loss from continuing operations			(1,175,932	)			(472,617	)
Net income attributable to the non-controlling interest		136,389		37,000			81,843		279,325
Net loss from discontinued operations, net of income taxes			—				(260,896	)
Net income (loss) attributable to American International Industries, Inc.	$	536,639	$	(28,584)	$		(265,120)	$	(1,318,987)
Net loss			(1,175,932	)			(733,513	)
Net income (loss) per common share - basic and diluted	$	0.25	$	(0.01)	$		(0.12)	$	(0.71)
Net loss attributable to the non-controlling interest			32,754				25,195
Weighted average common shares outstanding - basic and diluted		2,141,561		1,912,927			2,290,326		1,847,169
Net loss attributable to American International Industries, Inc.		$	(1,143,178	)		$	(708,318	)
Comprehensive income (loss):
Basic and diluted loss per common share:
Net income (loss)	$	509,342	$	(65,584)	$		(346,963)	$	(1,598,312)
Loss from continuing operations		$	(0.47	)		$	(0.22	)
Unrealized gain (loss) on marketable securities		16,250		(13,000)			43,550		(39,000)
Loss from discontinued operations		$	—			$	(0.12	)
Total comprehensive income (loss)		525,592		(78,584)			(303,413)		(1,637,312)
Weighted average common shares outstanding - basic and diluted			2,456,642				2,178,159
Comprehensive income (loss) attributable to the non-controlling interests		136,389		37,000			81,843		279,325
Comprehensive loss:
Comprehensive income (loss) attributable to American International Industries, Inc. shareholders	$	661,981	$	(41,584)	$		(221,570)	$	(1,357,987)
Net loss		$	(1,175,932	)		$	(733,513	)
Unrealized loss on marketable securities			(58,050	)			—
Total comprehensive loss			(1,233,982	)			(733,513	)
Comprehensive loss attributable to the non-controlling interests			32,754				25,195
Comprehensive loss attributable to American International Industries, Inc. shareholders		$	(1,201,228	)		$	(708,318	)

See accompanying notes to the unaudited consolidated financial statements.

AMERICAN INTERNATIONAL INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

		For the Nine Months Ended
		For the Three Months Ended
		September 30,
		March 31,
		2014		2013
		2015			2014
Cash flows from operating activities:
Net loss	$	~~(346,963)~~$	$(1,175,932	~~(1,598,312~~)	$	(733,513	)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss from discontinued operations			—			260,896
Depreciation and amortization		53,787		67,012
Loss from continuing operations			(1,175,932	)		(472,617	)
Stock-based compensation		215,320		342,880
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of guarantor fee		-		4,433
Depreciation and amortization			1,753			1,426
(Gain) loss on sale of assets		(1,470,012)		38,546
Impairment of oil and gas property			20,000			—
Realized (gain) loss on the sale of trading securities, net		41,494		(200,306)
Stock-based compensation			38,400			91,320
Unrealized losses on trading securities, net		213,143		41,708
Loss on sale of real estate			(971	)		—
Change in operating assets and liabilities:
Realized (gain) loss on the sale of trading securities, net			119,202			(12,555	)
Accounts receivable		(81,673)		(85,546)
Unrealized losses on trading securities, net			174,538			74,182
Accounts receivable – related parties		(503)		-
Change in operating assets and liabilities:
Inventories		(119,701)		28,821
Accounts receivable			—			5,091
Prepaid expenses and other current assets		~~(5,850)~~	(3,988	~~14,574~~)		—
Accounts payable – related parties		~~(2.212)~~	(141,786	~~131,100~~)		(2,212	)
Accounts payable and accrued expenses		~~457,174~~	(190,655	~~298,765~~)		61,018
Net cash used in operating activities		(1,045,996)		(916,325)
Net cash used in operating activities from continuing operations			(1,159,439	)		(515,243	)
Cash flows from investing activities:
Net cash used in operating activities from discontinued operations			—			(88,663	)
Purchase of trading securities		(3,332,574)		(44,090)
Net cash used in operating activities			(1,159,439	)		(603,906	)
Purchase of oil and gas properties		(20,000)		(87,500)
Cash flows from investing activities:
Purchase of VOMF interest in AMIH		-		(12,000)
Purchase of trading securities			(305,590	)		(2,485,120	)
Sale of trading securities		~~3,232,675~~	9,332	~~209,187~~		2,385,037
Proceeds from sale of assets		2,537,924		53,651
Investment in oil and gas property			—			(20,000	)
Purchase of property and equipment		(7,862)		(1,082)
Proceeds from sale of real estate held for sale			1,662,500			—
Costs of securing patents, trademarks and tooling		(28,277)		(27,394)
Proceeds from notes receivable			2,000,715			30,559
Purchase of land		(220,000)		-
Net cash provided by (used in) investing activities from continuing operations			3,366,957			(89,524	)
Issuance of notes receivable		-		(73,700)
Net cash provided by investing activities from discontinued operations			—			1,173,705
Proceeds from notes receivable		40,486		820,221
Net cash provided by investing activities			3,366,957			1,084,181
Net cash provided by investing activities		2,202,372		837,293
Cash flows from financing activities:
Cash flows from financing activities:
Principal payments on debt			(318,910	)		(3,319	)
Proceeds from sale of common stock of subsidiary		-		100,000
Proceeds from issuance of debt			—			300,000
Net borrowings under line of credit agreements		638,993		122,094
Proceeds from related party advances			37,786			—
Bank overdrafts		-		(61,272)
Payments for acquisition of treasury stock			(6,990	)		(7,424	)
Proceeds from stock subscription receivable		-		55,500
Net cash provided by (used in) financing activities from continuing operations			(288,114	)		289,257
Proceeds from the issuance of debt		450,000		-
Net cash used in financing activities from discontinued operations			—			(709,000	)
Principal payments on debt		(2,239,620)		(186,121)
Net cash used in financing activities			(288,114	)		(419,743	)
Loans to related parties		-		(9,269)
Net increase in cash and cash equivalents			1,919,404			60,532
Payments for acquisition of treasury stock of subsidiary		(1,706)		(884)
Cash and cash equivalents at beginning of period			373,482			670,372
Payments for acquisition of treasury stock		(19,024)		(21,168)
Cash and cash equivalents at end of period		$	2,292,886		$	730,904
Net cash used in financing activities		(1,171,357)		(1,120)
Supplemental cash flow information:
Net decrease in cash and cash equivalents		(14,981)		(80,152)
Interest paid		$	2,308		$	47,119
Cash and cash equivalents at beginning of period		715,572		1,016,454
Income taxes paid		$	—		$	—
Cash and cash equivalents at end of period	$	700,591	$	936,302
Non-cash investing and financing transactions:
Supplemental cash flow information:
Unrealized loss on marketable securities		$	58,050		$	—
Interest paid	$	2,308	$	189,370
Reclassification of promissory note to accounts payable and accrued liabilities		$	131,081		$	—
Income taxes paid	$	129,586	$	3,149
Cancellation of treasury stock		$	242,591		$	—
Non-cash investing and financing transactions:
Write off of Inez acquisition payable		$	230,000		$	—
Unrealized loss on marketable securities	$	43,550	$	(39,000)
Contingent obligation		$	750,000		$	—
Adjustment to non-controlling interest in AMIH and BOG	$	-	$	172,136
Contract obligation paid with restricted cash		$	71,133		$	—
Stock and note issued to related party for acquisition of real estate	$	450,000	$	360,000
Capitalized asset retirement costs		$	911		$	—
Real estate sold for note receivable	$	2,000,000	$	-
Conversion of related party note receivable for real estate	$	-	$	181,000
Conversion of BOG payable owed to AMIN to equity	$	-	$	125,181
Unpaid portion of Inez oil and gas property acquisition	$	230,000	$	-
Capitalized asset retirement costs	$	162	$	1,966
Receipt of AMIH common shares for stock subscription receivable	$	-	$	16,500

See accompanying notes to the unaudited consolidated financial statements.

AMERICAN INTERNATIONAL INDUSTRIES, INC.

Notes to Consolidated Financial Statements

(Unaudited)

Note 1 - Summary of Significant Accounting Policies

The accompanying ~~unaudited~~ interim ~~consolidated~~unaudited consolidated financial statements of American International Industries, Inc. (“American”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in American's latest Annual Report filed with the SEC on Form 10-K for the year ended December 31, ~~2013~~2014. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.

Organization, Ownership and Business

American International Industries, Inc. ~~("American")~~, a Nevada ~~corporation~~Corporation, operates as a diversified holding company with a number of wholly-owned subsidiaries and some partially owned subsidiaries. American is a diversified corporation with interests in industrial/commercial companies and an oil and gas service business. American's business strategy is to acquire controlling equity interests in businesses that it considers undervalued. American's management takes an active role in providing its subsidiaries with access to capital, leveraging synergies and providing management expertise in order to improve its subsidiaries' growth.

Principles of Consolidation

The consolidated financial statements include the accounts of American and its wholly-owned subsidiaries ~~Northeastern Plastics, Inc. ("NPI") and~~ American International Texas Properties, Inc. ("AITP"), American International Holdings Corp. (“AMIH”), formerly Delta Seaboard International, Inc. ("Delta"), in which American holds a 93.2% shareholder interest, and Brenham Oil & Gas Corp. (“BOG”), in which American holds a 51.0% interest. All significant intercompany transactions and balances have been eliminated in consolidation.

Management's Estimates and Assumptions

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses. Actual results could differ from these estimates.

Cash and Cash Equivalents

American considers cash and equivalents to include cash on hand and certificates of deposits with banks with an original maturity of three months or less, that American intends to convert.

Accounts Receivable

Accounts receivable consist primarily of trade receivables, net of a valuation allowance for doubtful accounts.

Allowance for Doubtful Accounts

American extends credit to customers and other parties in the normal course of business. American regularly reviews outstanding receivables and provides for estimated losses through an allowance for doubtful accounts. In evaluating the level of established reserves, American makes judgments regarding its customers' ability to make required payments, economic events and other factors. As the financial condition of these parties change, circumstances develop or additional information becomes available, adjustments to the allowance for doubtful accounts may be required. When American determines that a customer may not be able to make required payments, American increases the allowance through a charge to income in the period in which that determination is made.

Notes Receivable

Notes receivable are carried at the expected net realizable value. Impairment of notes receivable is based on management's continued assessment of the collectability of debtors.

Inventories

Inventories are valued at the lower-of-cost or market on a first-in, first-out basis, and include the cost of the inventories and freight. American assesses the realizability of its inventories based upon specific usage and future utility. A charge to income is taken when factors that would result in a need for a reduction in the valuation, such as excess or obsolete inventory, are noted.

Investment Securities

American accounts for its investments in accordance with ASC 320-10, "Investments in Debt and Equity Securities." Management determines the appropriate classification of its investments in marketable securities at the time of purchase and reevaluates such determination at each balance sheet date. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Debt securities for which American does not have the intent or ability to hold to maturity and equity securities not classified as trading securities are classified as available-for-sale. The cost of investments sold is determined on the specific identification or the first-in, first-out method. Trading securities are reported at fair value with unrealized gains and losses recognized in earnings, and available-for-sale securities are also reported at fair value but unrealized gains and losses are included in stockholders' equity. Management determines fair value of its investments based on quoted market prices at each balance sheet date.

Oil and Gas Properties, Full Cost Method

BOG uses the full cost method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells including directly related overhead costs and related asset retirement costs are capitalized.

Under this method, all costs, including internal costs directly related to acquisition, exploration and development activities, are capitalized as oil and gas property costs. Properties not subject to amortization consist of exploration and development costs that are evaluated on a property-by-property basis. Amortization of these unproved property costs begins when the properties become proved or their values become impaired. BOG assesses overall values of unproved properties, if any, on at least an annual basis or when there has been an indication that impairment in value may have occurred. Impairment of unproved properties is assessed based on management's intention with regard to future development of individually significant properties and the ability of BOG to obtain funds to finance their programs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized.

Under this method, sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves. If it is determined that the relationship is significantly altered, the corresponding gain or loss will be recognized in the consolidated statements of operations.

Ceiling Test

In applying the full cost method, BOG performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of oil and gas properties is compared to the “estimated present value” of its proved reserves, discounted at a 10-percent interest rate of future net revenues, based on current economic and operating conditions at the end of the period, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties. If capitalized costs exceed this limit, the excess is charged as an impairment expense. ~~During~~There ~~the~~was ~~nine~~no ~~months~~ceiling ~~ended~~test ~~September~~write-down ~~30,~~recorded ~~2014,~~during nothe ~~impairment~~three ofmonths ~~oil~~ended ~~and~~March ~~gas~~31, ~~properties~~2015 ~~was~~and ~~recorded~~2014.

Property, Plant, Equipment, Depreciation, Amortization and Long-Lived Assets

Long-lived assets include:

Property, Plant and Equipment – Assets acquired in the normal course of business are recorded at original cost and may be adjusted for any additional significant improvements after purchase. We depreciate the cost evenly over the assets’ estimated useful lives. Upon retirement or sale, the cost of the assets disposed of and the related accumulated depreciation are removed from the accounts, with any resultant gain or loss being recognized as a component of other income or expense.

Identifiable intangible assets – These assets are recorded at acquisition cost. Intangible assets with finite lives are amortized evenly over their estimated useful lives.

At least annually, we review all long-lived assets for impairment. When necessary, we record changes for impairments of long-lived assets for the amount by which the present value of future cash flows, or some other fair value measure, is less than the carrying value of these assets.

Revenue Recognition

Revenue is recognized when the earnings process is completed, the risks and rewards of ownership have transferred to the customer, which is generally the same day as delivery or shipment of the product, the price to the buyer is fixed or determinable, and collection is reasonably assured. Delta receives purchase orders for all of its service work and related pipe sales. All sales are recorded when the work is completed or when the pipe is sold. NPI has purchase orders for all sales, of which many of the items are requested to be container shipped and shipped directly to the end users. All sales are recorded when the inventory items are shipped. Taxes assessed by a governmental authority that are incurred as a result of a revenue transaction are not included in revenues. American has no significant sales returns or allowances.

Income Taxes

American is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized. Interest and penalties associated with income taxes are included in selling, general and administrative expense.

American has adopted ASC 740-10 “Accounting for Uncertainty in Income Taxes,” which prescribes a comprehensive model of how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740-10 states that a tax benefit from an uncertain position may be recognized if it is "more likely than not" that the position is sustainable, based upon its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. As of ~~September~~March 3031, ~~2014~~2015, American had not recorded any tax benefits from uncertain tax positions.

Net Loss Per Common Share

The basic net loss per common share is computed by dividing the net loss by the weighted average number of shares outstanding during a period. Diluted net loss per common share is computed by dividing the net loss, adjusted on an as if converted basis, by the weighted average number of common shares outstanding plus potential dilutive securities. During the three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014, the Company had no potential dilutive securities outstanding.

Advertising Costs

The cost of advertising is expensed as incurred.

Stock-Based Compensation

American sometimes grants shares of stock for goods and services and in conjunction with certain agreements. These grants are accounted for based on the grant date fair values.

Fair Value of Financial Instruments

Effective January 1, 2008, American adopted the framework for measuring fair value that establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Basis of Fair Value Measurement

Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the asset or the liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 Unobservable inputs reflecting American's own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

American believes that the fair value of its financial instruments comprising cash, accounts receivable, notes receivable, accounts payable, and notes payable approximate their carrying amounts. The interest rates payable by American on its notes payable approximate market rates. The fair values of American's Level 1 financial assets, marketable securities - available for sale, are based on quoted market prices of the identical underlying security. As of ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~2014, American did not have any significant Level 2 or 3 financial assets or liabilities. The following tables provide fair value measurement information for American's marketable securities - available for sale:

As of September 30, 2014
As of March 31, 2015
Fair Value Measurements Using:
	Carrying Amount		~~Total Fair Value~~	~~Quoted~~Total ~~Prices~~Fair ~~in Active Markets (Level 1)~~Value		~~Significant Other Observable Inputs (Level 2)~~	Quoted Prices in Active Markets (Level 1)	~~Significant Unobservable Inputs (Level 3)~~	Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial Assets:
Marketable Securities - available for sale	$ ~~51,550~~	5,200	~~$ 51,550~~	$ ~~51,550~~	5,200	~~$ -~~	$	~~$ -~~5,200	$	—	$	—
Marketable securities - trading	$	118,983		$	118,983		$	118,983	$	—	$	—

As of December 31, 2013

As of December 31, 2014

Fair Value Measurements Using:

~~Carrying Amount~~

~~Total~~Carrying ~~Fair Value~~Amount

~~Quoted Prices in Active Markets (Level 1)~~

~~Significant Other Observable Inputs (Level 2)~~

~~Significant Unobservable Inputs (Level 3)~~

Total Fair Value

Quoted Prices in Active Markets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Financial Assets:

Marketable Securities - available for sale

~~$ 8,000~~

$ ~~8,000~~

~~$ 8~~63,~~000~~250

~~$ -~~

63,250

—

Subsequent Events

American has evaluated all transactions from ~~September 30~~March 31, ~~2014~~2015 through the financial statement issuance date for subsequent event disclosure consideration.

Reclassifications

Certain balances from the prior period have been reclassified to conform to the current period presentation.

New Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our consolidated financial position, operations or cash flows.

Note 2 - Concentrations of Credit Risk

American maintains its cash and certificates of deposit in commercial accounts at major financial institutions. The FDIC no longer has limits on non-interest bearing accounts. American has not incurred losses related to these deposits.

Trade accounts receivable subject American to the potential for credit risk with customers in the retail and distribution sectors. To reduce credit risk, American performs ongoing evaluations of its customer’s financial condition but generally does not require collateral. As of and during the nine months ended September 30, 2014, the Company had one customer that accounted for 21% of revenues, one customer that accounted for 1% of revenues and 24% of accounts receivable, and one customer that accounted for 19% of revenues.

Note 3 - Trading Securities and Marketable Securities - Available for Sale

Trading securities - represents investments in equity securities primarily include shares of common stock in various companies that are bought and held principally for the purpose of selling them in the near term with the objective of generating profits on short-term differences in price. Any unrealized changes in market values are recognized in the consolidated statements of operations.

During the three months ended ~~September~~March 3031, ~~2014~~ 2015 and ~~2013~~2014, American had net unrealized trading losses of $~~160~~174,~~295~~538 and ~~net unrealized trading gains of~~ $4674,~~615~~182, respectively, related to securities held on those dates. American recorded net realized losses of $90119,~~912~~202 and net realized gains of $6712,~~679~~555 during the three months ended March ~~September 30~~31, ~~2014~~2015 and ~~2013~~2014, respectively.

During the nine months ended September 30, 2014 and 2013, American had net unrealized trading losses of $213,143 and $41,708, respectively, related to securities held on those dates. American recorded net realized losses of $41,494 and gains of $200,306 during the nine months ended September 30, 2014 and 2013, respectively.

Marketable securities - available for sale - any unrealized changes in market values are recognized as other comprehensive loss. At ~~September~~March 3031, ~~2014~~2015, this investment was valued at $515,~~550~~200, based on the closing market price of $0.~~0185.~~40 American recognized other comprehensive ~~gains~~losses of $4358,~~550~~050 and ~~losses of~~ $~~39,000~~0 during the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014, respectively, for the unrealized changes in market values for this investment.

Equity markets can experience significant volatility and therefore are subject to changes in value. Based upon the current volatile nature of the U.S. securities markets and the decline in the U.S. economy, we believe that it is possible, that the market values of our equity securities could decline in the near term. We have a policy in place to review our equity holdings on a regular basis. Our policy includes, but is not limited to, reviewing each company’s cash position, earnings/revenue outlook, stock price performance, liquidity and management/ownership. American seeks to manage exposure to adverse equity returns in the future by potentially increasing the diversity of our securities portfolios.

Note 4 - Notes Receivable

~~Short-term~~Note ~~notes~~receivables consist ~~receivable consists~~ of the following at March 31, 2015 and December 31, 2014:

	September 30, 2014		December 31, 2013
	March 31, 2015			December 31, 2014
Unsecured note receivable, interest at 5%, principal was originally due on July 10, 2014; maturity extended to December 31, 2014	$ 12,000		$ 32,000
Unsecured note receivable for sale of a former subsidiary, Marald, Inc., due in monthly payments of $3,074, including interest at 4%, beginning July 1, 2012 through June 1, 2022 (a)	$	281,073		$	281,073
First lien note receivable due in monthly payments of $8,333, including interest at 5%, principal due on or before August 25, 2016 (b)		—			2,000,000
Unsecured note receivable due in monthly payments of $5,000, including interest at 3%, principal due on or before April 1, 2018 (c)		569,478			570,193
Total notes receivable		850,551			2,851,266
Reserve due to uncertainty of collectability		(19,523	)		(19,523	)
Subtotal		831,028			2,831,743
Less: current portion		(60,000	)		(2,346,053	)
Long-term notes receivable	$	771,028		$	485,690

~~Long-term~~(a) Sale of Marald, Inc., principal and interest due monthly through June 1, 2022. The original note ~~receivables~~was ~~consist~~for $300,000 and was discounted to $200,000 for the receipt of full payment on or before October 25, 2007. In July 2012, payments began under a new extension and renewal agreement for the ~~following:~~note balance plus accrued interest, with the payment terms indicated above. Since April 2013, no payments have been received on this note. American has filed a lawsuit for the total amount owed plus interest and attorney’s fees. The Company believes this receivable is fully collectible, but has classified the receivable as long-term at March 31, 2015 and December 31, 2014.

	September 30, 2014	December 31, 2013
Unsecured note receivable for sale of a former subsidiary, Marald, Inc., due in monthly payments of $3,074, including interest at 4%, beginning July 1, 2012 through June 1, 2022 (a)	$ 281,073	$ 281,073
Unsecured note receivable due in monthly payments of $5,000, including interest at 3%, principal due on or before April 1, 2018 (b)	575,182	595,668
Unsecured note receivable due in monthly payments of $8,333, including interest at 5%, principal due on or before August 25, 2016 (c)	2,000,000	-
Total notes receivable	2,856,255	876,741
Reserve due to uncertainty of collectability	(19,523)	(19,523)
Subtotal	2,836,732	857,218
Less: current portion	(60,000)	(42,821)
Long-term notes receivable	$ 2,776,732	$ 814,397

(b)

First lien note receivable due August 25, 2016. AITP sold its 174 acres in Waller County, Texas, which closed on July, 25, 2014. In connection with the close, the Company entered into a promissory note receivable with the purchaser of the aforementioned property for $2,000,000. This receivable was paid in full in January 2015.

(ac) ~~Sale~~Unsecured ofnote ~~Marald,~~receivable ~~Inc., principal and interest~~ due ~~monthly through~~April ~~June~~ 1, ~~2022~~2018. ~~The~~ ~~original~~This note was issued for $~~300~~601,~~000~~300. ~~and~~This note was ~~discounted~~previously toowed ~~$200~~by Southwest Gulf Coast Properties,~~000~~ ~~for~~Inc. ~~the~~("SWGCP") ~~receipt~~resulting offrom ~~full~~closing ~~payment~~costs, principal and interest paid by American on orthe ~~before~~SWGCP ~~October~~loan ~~25,~~at ~~2007~~TXCB. In ~~July 2012~~February, ~~payments~~SWGCP ~~began~~obtained ~~under~~ a ~~new~~judgment ~~extension~~against ~~and~~Kentner ~~renewal~~Shell ~~agreement~~("Shell"), ~~for~~who personally guaranteed the note, ~~balance~~for ~~plus accrued interest~~$4,193,566 ~~with~~for ~~the~~matters ~~payment~~related ~~terms~~to ~~indicated~~these ~~above~~condominiums. ~~Since~~On ~~April~~September ~~2013~~30, no2011, ~~payments~~SWGCP ~~have~~assigned ~~been~~all ~~received~~of onits interests in this judgment to American in exchange for this note and $10. On April 1, 2013, American ~~has~~and ~~filed~~Shell executed a ~~lawsuit~~$620,000 ~~for~~note ~~the~~agreement ~~total~~whereby ~~amount~~Shell ~~owed~~will ~~plus~~make ~~interest~~monthly ~~and~~payments ~~attorney’s~~in ~~fees. The~~the ~~Company~~amount ~~believes~~of ~~this~~$5,000, ~~receivable~~beginning isMay ~~fully~~1, ~~collectible~~2013, ~~but~~with ~~has~~a ~~classified~~balloon ~~the~~payment ~~receivable~~for asthe ~~long-term~~remaining atamount ~~September~~owed ~~30,~~due ~~2014~~on ~~and~~or ~~December~~before 31April 1, ~~2013~~2018.

(b) Unsecured note receivable due April 1, 2018. This note was issued for $601,300. This note was previously owed by Southwest Gulf Coast Properties, Inc. ("SWGCP") resulting from closing costs, principal and interest paid by American on the SWGCP loan at TXCB. In February, SWGCP obtained a judgment against Kentner Shell ("Shell"), who personally guaranteed the note, for $4,193,566 for matters related to these condominiums. On September 30, 2011, SWGCP assigned all of its interests in this judgment to American in exchange for this note and $10. On April 1, 2013, American and Shell executed a $620,000 note agreement whereby Shell will make monthly payments in the amount of $5,000, beginning May 1, 2013, with a balloon payment for the remaining amount owed due on or before April 1, 2018.

(c) Unsecured note receivable due August 25, 2016. AITP sold its 174 acres in Waller County, Texas, which closed on July, 25, 2014. In connection with the close, the Company entered into a promissory note receivable with the purchaser of the aforementioned property for $2,000,000. The purchaser will make monthly installment payments of $8,333 to the Company, which includes annual interest of 5%. The final monthly installment payment is due on July 25, 2016. On August 25, 2016, all remaining principal and accrued interest is due to the Company.

At ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~2014, American had reserved a total of $19,523 on all notes receivable in the aggregate due to uncertainty of collectability. American believes this reserve remains appropriate at ~~September~~March ~~30, 2014 and December~~ 31, ~~2013~~2015.

Interest income on notes receivable is recognized principally by the simple interest method. During the three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014, American recognized interest income of $~~17,973,~~299 ~~$25,701, $ 1,524~~ and $524,~~082~~707, respectively, on the notes receivable.

Note 5 - ~~Inventories~~ Real Estate Held for Sale

Inventories consisted of the following:

	September 30, 2014	December 31, 2013
Finished goods	$ 1,905,883	$ 1,573,867
Less: reserve for obsolescence	(291,152)	(78,837)
Inventories, net	$ 1,614,731	$ 1,495,030

Note 6 - Real Estate Held for Sale

Real estate held for sale consisted of the following:

	September 30, 2014	December 31, 2013
		March 31, 2015		December 31, 2014
65 acres in Galveston County, Texas	~~$ 520,382~~	$ ~~520,382~~	520,382	$	520,382
1.705 acres in Galveston County, Texas	~~460,000~~	~~460,000~~	460,000		460,000
Two residential lots in Galveston County, Texas (a)	-	95,861
Dawn Condominium units on the waterfront in Galveston, Texas; 6 and 7 units as of September 30, 2014 and December 31, 2013, respectively			788,033		788,033
Dawn Condominium units on the waterfront in Galveston, Texas; 6 and 7 units as of September 30, 2014 and December 31, 2013, respectively (b)	788,033	888,328
96 acres – vacant commercial use land in Galveston County, Texas			1,211,000		1,211,000
96 acres - vacant commercial use land in Galveston County, Texas (c)	1,211,000	541,000
22 acres – vacant mixed use land in Houston, Texas (a)			—		1,661,656
5 acres - vacant commercial use land in Houston, Texas	1,303,905	1,303,905
31 acres – vacant mixed use land in Houston, Texas			1,772,564		1,772,564
31 acres - vacant mixed use land in Houston, Texas	1,772,564	1,772,564
		$	4,751,979	$	6,413,635
17 acres - vacant mixed use land in Houston, Texas	1,155,359	1,155,359
174 acres in Waller County, Texas (d)	-	1,684,066
	$ 7,211,243	$ 8,421,465

(a) ~~Two~~22 ~~residential~~acres- ~~lots~~vacant inmixed ~~Galveston~~use ~~County~~land in Houston,, Texas -– During ~~AITP~~the ~~sold~~three ~~its~~months ~~two~~ended ~~residential~~March ~~lots in Galveston County~~31, ~~Texas~~2015, ~~which~~the ~~closed~~Company onsold ~~September~~22 ~~30,~~acres ~~2014,~~of ~~for~~vacant amixed ~~total~~use ~~cash~~land for gross proceeds of $~~133~~1,~~673~~750,000 to ~~resulting~~a inthird party and recorded a ~~total~~$971 gain. onThe sale of ~~assets~~the real estate triggered a clause in a previously executed agreement pursuant to which $750,000 of the sale proceeds was placed into an escrow account to serve as collateral for an agreement between a previously owned subsidiary (NPI) and a third party. As a result, $20750,~~812~~000 of the sale proceeds were placed in an escrow account to serve as a guarantee under the agreement. During the three months ended March 31, 2015, the escrow account paid $71,133 in expenses which reduced the escrow account balance to $678,867.

(b) Dawn Condominium units on the waterfront in Galveston, Texas - During the nine months ended September 30, 2014, one Dawn Condominium unit was sold for a total of $79,216, resulting in a total loss on sale of assets of $21,079.

(c) 96 acres - vacant commercial use land in Galveston County, Texas - On June 2, 2014 the Company and Daniel Dror II entered into an agreement whereby the Company agreed to purchase the remaining 50% interest in 96 acres in Galveston, Texas for $220,000 in cash, a $300,000 five year promissory note, and 120,000 shares of common stock valued at $150,000.

(d) 174 acres in Waller County, Texas - AITP sold its 174 acres in Waller County, Texas, which closed on July 25, 2014, for a total of $3,350,018, comprised of a $2,000,000 note receivable (See Note 4) and $1,131,630 of cash proceeds, resulting in a gain on sale of assets for the nine months ended September 30, 2014 of $1,447,564.

American reviewed the accounting standards Real Estate - General (ASC 970-10) and Property, Plant, and Equipment (ASC 360-10) to determine the appropriate classification for these properties. According to ASC 970-10, real estate that is held for sale in the ordinary course of business is classified as inventory, which is a current asset. ASC 360-10 provides the following criteria for property to be classified as held for sale:

Management with the appropriate authority commits to a plan to sell the asset;

The asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets;

An active program to locate a buyer and other actions required to complete the plan of sale have been initiated;

The sale of the property or asset within one year is probable and will qualify for accounting purposes as a sale;

The asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and

Actions required to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Management consulted with the real estate brokers for these properties and reviewed the recent interest for each property. Based on our consultations and review, we believe that the sale of these properties within one year is probable. We concluded that all of these criteria have been met for these properties and that they are appropriately classified as held for sale in current assets.

Note 6 7 - ~~Leases~~Oil and Gas Properties

OnBrenham ~~March~~uses ~~6, 2014,~~ the ~~Company’s~~full ~~wholly~~cost ~~owned~~method ~~subsidiary,~~of ~~Northeastern~~accounting for ~~Plastics,~~oil ~~Inc.~~and ~~sold~~gas ~~its~~producing ~~office warehouse property, a 32,000 sq~~activities. Costs ~~ft.~~to ~~office~~acquire ~~warehouse~~mineral ~~facility~~interests onin ~~I-59~~oil inand ~~Houston,~~gas ~~Texas~~properties, to adrill ~~third~~and ~~party.~~equip ~~The~~exploratory wells ~~property~~used ~~was~~to ~~sold~~find ~~for~~proved $1reserves,~~325,000~~ inand ~~cash.~~to ~~The~~drill ~~Company~~and ~~paid~~equip ~~selling~~development ~~expenses~~wells, ofincluding ~~$108,314,~~directly related overhead costs and ~~received~~related asset ~~cash~~retirement ~~proceeds~~costs ofare ~~$1,183,101~~capitalized. ~~The~~Properties ~~basis~~not insubject ~~the~~to ~~property~~amortization ~~and~~consist ~~equipment~~of ~~sold~~exploration ~~was~~and ~~$727,320~~development oncosts ~~the~~that are ~~date~~evaluated ofon ~~the~~a ~~sale~~property-by-property basis. ~~Because~~Amortization ~~the~~of ~~Company~~these ~~immediately~~unproved ~~leased~~property ~~back~~costs ~~the~~begins ~~warehouse~~when ~~from~~ the ~~seller~~properties ~~upon closing~~become proved, ~~the~~or ~~transaction~~their ~~was~~values ~~accounted~~become ~~for~~impaired asand athe ~~sales~~corresponding ~~leaseback~~costs ~~transaction,~~are ~~pursuant~~added to ~~guidance~~the incapitalized ~~ASC~~costs ~~840,~~subject ~~Leases~~to amortization. During ~~The~~the ~~Company~~three ~~recorded~~months ~~deferred~~ended ~~income~~March of31, ~~$489~~2015,~~366~~ ~~initially~~depletion ~~which~~of ~~will~~oil beand ~~amortized~~gas toproperties ~~rent~~of ~~expense~~$189 ~~over~~was ~~the~~recorded. ~~life~~During of the ~~lease.~~three Asmonths ended ofMarch ~~September 30~~31, 2014, ~~the~~depletion ~~Company recognized $24,568~~ of ~~the~~oil ~~deferred~~and ~~income~~gas asproperties ~~gain~~of on$821 ~~sales~~was recorded. Costs of ~~assets.~~oil ~~The~~and ~~lease~~gas ~~term~~properties isare 10amortized using ~~years~~the ~~and~~units ~~annual~~of ~~base~~production ~~rent~~method. Sales isof ~~$121,500,~~oil and ~~then~~natural ~~increases~~gas byproperties 2%are ~~each~~accounted ~~year~~for ~~over~~as ~~the~~adjustments 10to ~~year life of~~ the ~~lease.~~net full ~~Daniel~~cost ~~Dror~~pool, ~~Chairman~~ and ~~CEO of American~~generally, isno again ~~personal~~or ~~guarantor~~loss ofis ~~the lease~~recognized.

~~Note 8~~In applying the full cost method, Brenham performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of oil and gas properties is compared to the “estimated present value” of its proved reserves discounted at a 10-percent ~~Oil~~interest rate of future net revenues, based on current economic and ~~Gas~~operating ~~Properties~~conditions at the end of the period, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties. If capitalized costs exceed this limit, the excess is charged as an impairment expense. During the three months ended March 31, 2015 and 2014, impairment of oil and gas properties of $20,000 and $0 was recorded, respectively.

Brenham uses the full cost method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells, including directly related overhead costs and related asset retirement costs are capitalized. Properties not subject to amortization consist of exploration and development costs that are evaluated on a property-by-property basis. Amortization of these unproved property costs begins when the properties become proved, or their values become impaired and the corresponding costs are added to the capitalized costs subject to amortization. During the three and nine months ended September 30, 2014, depletion of oil and gas properties of $118 and $1,411, respectively, was recorded. During the three and nine months ended September 30, 2013, depletion of oil and gas properties of $23 and $101, respectively, was recorded. Costs of oil and gas properties are amortized using the units of production method. Sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool, and generally, no gain or loss is recognized.

In applying the full cost method, Brenham performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of oil and gas properties is compared to the “estimated present value” of its proved reserves discounted at a 10-percent interest rate of future net revenues, based on current economic and operating conditions at the end of the period, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties. If capitalized costs exceed this limit, the excess is charged as an impairment expense. During the nine months ended September 30, 2014 and 2013, no impairment of oil and gas properties was recorded.

Below are the components of the oil and gas properties balance:

		September 30, 2014		December 31, 2013
		March 31, 2015			December 31, 2014
Royalty interest in 24 acres in Washington County, Texas (a)	$	-	$	-
Royalty interest in 24 acres in Washington County, Texas		$	—		$	—
Royalty interest in 700 acres in the Permian Basin (b)		8,400		8,400
Royalty interest in 700 acres in the Permian Basin			8,400			8,400
10% working interest in the Pierce Junction Field (c)		87,500		87,500
10% working interest in the Pierce Junction Field			87,500			87,500
Lease of 394 acres in the Gillock Field (d)		83,500		83,500
Lease of 394 acres in the Gillock Field			83,500			83,500
Lease of 332 acres in Inez Prospect (e)		250,000		-
Lease of 332 acres in Inez Prospect (a)			—			250,000
Capitalized asset retirement costs		~~6,217~~	4,710	~~6,055~~		4,003
Total oil and gas properties		~~435,617~~	184,110	~~185,455~~		433,403
Accumulated depletion		~~(3,393)~~	(4,151	~~(1,982~~)		(3,962	)
Net capitalized costs	$	~~432,224~~$	$179,959	~~183,473~~	$	429,441

a) ~~Royalty~~ Lease ~~interest~~of in332 24 acres in ~~Washington~~the Inez ~~County,~~Prospect ~~Texas~~ - ~~The~~On ~~Company has~~January an8, ~~oil~~2014, ~~and~~the ~~gas~~Company ~~mineral~~entered ~~royalty~~into ~~interest, covering~~ a ~~twenty-four~~letter ~~acre~~of ~~tract~~intent ofwith ~~land~~a ~~located~~third inparty ~~Washington~~to ~~County,~~acquire ~~Texas,~~a ~~which~~332-acre isoil and ~~carried~~gas onlease, the ~~balance~~“Inez ~~sheet~~Prospect,” atlocated ~~$0. The~~in ~~royalty~~Victoria ~~interest~~County, isTexas, ~~currently~~and ~~leased~~the by#1 ~~Anadarko~~Roberts ~~Petroleum~~Unit ~~Corporation~~well-bore, ~~for~~and aall ~~term continuing until~~ the down-hole ~~covered~~equipment ~~minerals~~and ~~are~~surface noequipment ~~longer~~associated ~~produced~~therewith. inOn ~~paying~~April ~~quantities~~10, ~~from~~2014, the ~~leased~~Company ~~premises. Royalties on the minerals produced are currently incidental~~ and ~~paid~~ to the ~~Company~~third asparty ~~follows:~~entered ~~(i)~~into a ~~for~~prospect ~~oil~~ and ~~other~~lease ~~liquid~~acquisition ~~hydrocarbons,~~agreement. ~~and~~Pursuant ~~(ii)~~to ~~for~~the ~~gas~~agreement, ~~(including~~the ~~casing-head~~Company ~~gas);~~agreed ~~the~~to ~~royalty~~acquire is100% ~~one-ninth~~ of the ~~net~~working ~~proceeds~~interest for ~~realized~~a bytotal ~~Anadarko~~purchase ~~Petroleum~~price ~~Corporation~~of on$250,000, ~~the~~consisting ~~sale~~of ~~thereof~~a $20,000 ~~less~~deposit, awhich ~~proportionate~~was ~~part~~paid ofduring adthe ~~valorem~~year ~~taxes~~ended ~~and~~December ~~production~~31, ~~severance~~2014, and ora ~~other~~payment ~~excise~~of ~~taxes. In addition,~~ the ~~Company~~remaining is$230,000 ~~entitled~~prior to ~~shut-in~~the ~~royalties~~beginning of $1any ~~per~~exploration ~~acre~~which ofis ~~land~~recorded ~~for~~in ~~every~~accounts ~~ninety-day~~payable ~~period~~and ~~within~~accrued expenses ~~which~~at ~~one~~December or31, ~~more~~2014. ofThe ~~the~~Company ~~wells~~wrote inthe ~~leased~~asset ~~premises,~~and orrelated ~~lands~~liabilities ~~pooled~~off ~~therewith,~~in ~~are~~full ~~capable~~during ofthe ~~producing~~quarter ~~paying~~ended ~~quantities~~March 31, 2015 ~~but~~as ~~such~~the ~~wells~~Company ~~are~~determined ~~either~~the ~~shut-in~~asset orwas ~~production~~fully ~~is not being sold~~impaired.

b) Royalty interest in 700 acres in the Permian Basin - On July 22, 2011, the Company entered into an Asset Purchase and Sale Agreement with Doug Pedrie, Davis Pedrie Associates, LLC and Energex Oil, Inc. (“Sellers”), pursuant to which the Company acquired 700 acres of unproved property located in the Permian Basin near Abilene, Texas. The agreement provided for the Sellers to complete all oil lease assignments by August 15, 2011. The purchase consideration for the acquisition is the issuance to Sellers of 2,000,000 restricted common shares of Brenham, valued at $8,400, with an additional 2,000,000 restricted common shares to be issued contingent upon realization of certain production targets in 2012. On March 8, 2012, this agreement was rescinded and replaced with an agreement that in consideration for the Brenham share issuance; Brenham has a 2.5% overriding royalty interest in all of the leases associated with this property and any properties acquired or renewed in the future within a ten-mile radius. In addition, the contingency to issue additional shares was removed.

c) 10% working interest in the Pierce Junction Field - On March 12, 2013, Brenham entered into an agreement with an effective date of January 1, 2013, to purchase a 10% working interest in the Pierce Junction Field for $50,000 cash and a $70,000 non-interest bearing note payable due on August 31, 2013. On May 30, 2013, the holder of this note payable accepted $37,500 as full payment and Brenham recorded $32,500 as a reduction in the value of the oil and gas property due to the decrease in the consideration given to acquire it.

d) Lease of 394 acres in the Gillock Field - Brenham leased 394 acres in Galveston County for the acquisition of 100% working interest in the Gillock Field from Kemah Development Texas, L.P. (“KDT”) and Daniel Dror II Trust of 2012 for $300 per acre, or $131,100 (recorded as accounts payable – related parties in the consolidated balance sheet as of September 30, 2014 and December 31, 2013) and 200,000 shares of American restricted common stock. Brenham issued 3,326,316 shares of Brenham restricted common stock to American as payment in full for the 200,000 shares issued by American on Brenham’s behalf. In 2002, KDT paid $1,175,000 for the original 437 acres and the mineral rights to 394 acres. However, KDT assigned no value to the mineral rights. Due to the related parties having no basis in the mineral rights, Brenham expensed the costs associated with the transaction, which totaled $447,100 and consisted of i) $316,000 of stock-based compensation calculated at the grant date fair value of the 3,326,316 shares of Brenham common stock issued to American (which equaled the grant date fair value of the common stock American issued to KDT and the Daniel Dror II Trust) and ii) the $131,100 related party payable.

e) Lease of 332 acres in the Inez Prospect - On January 8, 2014, the Company entered into a letter of intent with a third party to acquire a 332-acre oil and gas lease, the “Inez Prospect,” located in Victoria County, Texas, and the #1 Roberts Unit well-bore, and all the down-hole equipment and surface equipment associated therewith. On April 10, 2014, the Company and the third party entered into a prospect and lease acquisition agreement. Pursuant to the agreement, the Company has agreed to acquire 100% of the working interest for a total purchase price of $250,000, consisting of a $20,000 deposit, which was paid during the nine months ended September 30, 2014, and a payment of the remaining $230,000 prior to the beginning of any exploration which is recorded in accounts payable and accrued expenses at September 30, 2014. Exploration has not yet commenced, and the property is in the process of being sold. However, there can be no assurance that a sale will take place.

Note 97 - Property and Equipment

Major classes of property and equipment together with their estimated useful lives, consisted of the following:

	~~Years~~	Years	~~September 30, 2014~~		~~December 31, 2013~~	March 31, 2015			December 31, 2014
Land	-	$	-	$	507,661
Building and improvements			20			$	38,975		$	38,975
Building and improvements	20		71,161		922,945
Machinery and equipment			7-15				—			2,035
Machinery and equipment	7-15		115,026		112,991
Office equipment and furniture			7				103,501			101,467
Office equipment and furniture	7		146,052		151,982
Total							142,476			142,477
Total			332,239		1,695,579
Less accumulated depreciation							(117,504	)		(117,062	)
Less accumulated depreciation			(287,964)		(923,851)
Net property and equipment						$	24,972		$	25,415
Net property and equipment		$	44,275	$	771,728

OnDepreciation ~~March~~expense 6,during ~~2014,~~ the ~~Company’s~~three ~~wholly~~months ended March ~~owned subsidiary~~31, ~~Northeastern~~2015 ~~Plastics,~~and ~~Inc.~~2014 ~~sold its office warehouse property, a 32,000 sq. ft. office warehouse facility on I-59 in Houston, Texas. The property~~ was ~~sold for~~ $~~1,325,000~~443 ~~in cash,~~ and ~~Northeastern reduced its long-term debt with a~~ $1,000,000 payment of principal, and entered into a modification and extension agreement whereby the maturity date was extended from February 22, 2014 to February 22, 2019. The note, as amended, bears interest at 7~~.25% and payment of $3~~,~~941 are owed monthly for 59 months beginning March 22~~871, ~~2014, and a balloon payment owed for the remainder of the note payable and interest (approximately $196,000) due February 22, 2019~~respectively.

~~Depreciation expense during the three and nine months ended~~Note ~~September~~8 ~~30,~~- ~~2014 and 2013 was $2,304, $12,423, $11,467 and $34,279, respectively.~~Debt

Note 10 - Intangible Assets

Intangible assets at September 30, 2014 consisted of the following:

	Gross Carrying Amount	Accumulated Amortization	Intangibles, net	Average Weighted Lives
Goodwill related to the acquisition of NPI			$ 674,539	N/A
Patents for new NPI products and tooling	$ 262,784	$ 112,722	$ 150,062	3-10 years

Intangible assets at December 31, 2013 consisted of the following:

	Gross Carrying Amount	Accumulated Amortization	Intangibles, net	Average Weighted Lives
Goodwill related to the acquisition of NPI			$ 674,539	N/A
Patents for new NPI products and tooling	$ 234,506	$ 73,623	$ 160,883	3-10 years

Amortization expense for the three months and nine months ended September 30, 2014 and 2013 was $13,812, $39,098, $11,269 and $32,538 respectively.

Note 11 - Debt

Debt consisted of the following:

	September 30, 2014		December 31, 2013
		March 31, 2015			December 31, 2014
Note payable to a bank, due in monthly installments, including interest at 7.25% with a principal balance due on February 22, 2019, secured by real property. (a) (b)	$ 321,724		$ 1,341,243
Note payable to a bank, due in monthly installments, including interest at 7.25% with a principal balance due on February 22, 2019, secured by real property. This note payable was paid in full in March 2015.		$	—		$	317,027
Revolving line of credit to a bank, which allows NPI to borrow up to $2,500,000 through May 2016, secured by assets of NPI, including, but not limited to, accounts receivable, inventory, and equipment. (d)	1,957,027		-
Note payable to a bank, due in monthly installments, with interest at 12.5%, with a principal balance due in February 2017, secured by the Company’s real property. Daniel Dror, Chairman and CEO of American, is a personal guarantor of this note payable. (a)			226,783			229,960
Revolving line of credit to a bank, which allows NPI to borrow up to $2,000,000, interest due monthly at the greater of prime (3.25%) plus one or 5%, principal balance due April 30, 2014, secured by assets of NPI. (a) (d)	-		1,318,034
Note payable, non-interest bearing, which was issued in exchange for shares to be purchased by the Company, secured by 63,540 shares of the Company not delivered as of March 31, 2014, the Company has entered into an escrow agreement to resolve payment of this amount (b)			—			131,081
Note payable to a bank, due in quarterly payments of interest only, with interest at 5%, with a principal balance due May 31, 2014, secured by the Company’s real property. (e)	-		1,150,000
Note payable to a bank, due in monthly installments, with interest at 12.5%, with a principal balance due in June 30, 2017, secured by the Company’s real property. Daniel Dror, Chairman and CEO of American, is a personal guarantor of this note payable.			150,000			149,201
Note payable, due in monthly payments of $1,000, with interest at 4%. This note is paid in full.		-	3,000
Subtotal			376,783			827 ,269
Note payable to a bank, due in monthly installments, with interest at 12.5%, with a principal balance due in February 2017, secured by the Company’s real property. (a) (c)		232,218	-
Less current portion			(18,000	)		(372,983	)
Note payable, non-interest bearing, which was issued in exchange for shares to be purchased by the Company, secured by 63,540 shares of the Company not delivered as of September 30, 2014, the Company has entered into an escrow agreement to resolve payment of this amount		200,000	200,000
Total		$	358,783		$	454,286
Note payable to a bank, due in monthly installments, with interest at 12.5%, with a principal balance due in June 30, 2017, secured by the Company’s real property. (a) (c)		149,681	-

Subtotal	2,860,650	4,012,277
Less current portion	(2,019,468)	(3,697,808)
Total	$ 841,182	$ 314,469

(a) ~~Daniel~~On ~~Dror~~February 24, ~~Chairman~~2014, the Company entered into a promissory note agreement. The note bears interest at 12.5% and ~~CEO~~payments of ~~American~~$3,444 isare owed monthly for 35 months, beginning in March 2014, and a ~~personal~~payment ~~guarantor~~for the remainder of ~~these~~the ~~notes~~note payable is due during the 36th month.

(b) On ~~February~~April 2224, ~~2014~~2015, ~~the~~The Company ~~entered~~settled ~~into~~American International Industries, aInc. ~~modification~~ and ~~extension~~Daniel ~~agreement~~Dror ~~with~~v. ~~the~~Scott ~~bank~~and Maria Wolinsky. In ~~connection~~The ~~with~~Company ~~this~~agreed ~~agreement,~~to pay the ~~Company~~Wolinsky’s ~~paid~~$155,461 ~~down~~for $1delivery of 17,~~000,000~~940 of the ~~note~~Company’s ~~payable~~shares ~~owed~~ to ~~the~~settle ~~bank. In addition,~~ the ~~term~~lawsuit ofin ~~the~~full. ~~note~~In ~~payable~~connection ~~was~~with ~~extended from February 22~~settlement, ~~2014~~the toCompany ~~February~~recorded 22an additional $24,380 ~~2019. The~~obligation ~~note~~in asconnection ~~amended~~with ~~bears~~this ~~interest~~settlement atagreement ~~7.25%~~ and ~~payments~~reclassified ofthe $3131,~~941~~081 ~~are~~promissory ~~owed~~note ~~monthly~~to ~~for~~accrued 59liabilities as ~~months~~of ~~beginning~~ March 2231, ~~2014,~~2015. ~~and~~The a$155,461 ~~balloon~~obligation ~~payment~~was ~~owed~~paid ~~for~~in ~~the~~full ~~remainder~~in ofApril ~~the note payable and interest (approximately $196,000) due February 22, 2019~~2015.

~~(c)~~Note On9 ~~February~~- ~~24,~~Commitments ~~2014, the Company entered into a promissory note agreement. The note bears interest at 12.5%~~ and ~~payments of $3,444 are owed monthly for 35 months, beginning in March 2014, and a payment for the remainder of the note payable is due during the 36 th month.~~Contingencies

(d) On May 21, 2014, the Company entered into a new revolving line of credit agreement, which allows NPI to borrow up to $2,500,000. The previous line of credit balance owed was concurrently paid off.Legal

American International Industries, Inc. v. Juan Carlos Martinez. In 2002 American acquired 100% of Marald, Inc. from Juan Carlos Martinez. Mr. Martinez continued as an employee and President of Marald. A few months after the acquisition date, Mr. Martinez notified American that he would resign and demanded that Marald be sold back to him. American sold Marald to Mr. Martinez for $225,000 and two 10 year promissory notes for $300,000. In October 2007, no payments had been made, causing the notes to go into default. In May 2010, American agreed to cancel the notes in exchange for a new $300,000 personal note with Mr. Martinez. During 2013, the note entered into default status due to non-payment. Under the terms of the note, American accelerated the maturity with the entire unpaid principal balance plus all interest at a default rate of 18% is immediately due and payable. American has filed a lawsuit for the total amount owed plus interest and attorney’s fees. The Company believes this $281,073 receivable is fully collectible, but has classified the receivable as long-term at March 31, 2015 and December 31, 2014.

American International Industries, Inc. and Daniel Dror v. Scott and Maria Wolinsky. On October 1, 2013, American entered into a stock purchase agreement with Scott Wolinsky, a former director of American, and Maria Wolinsky, whereby American purchased the Wolinskys’ 89,540 shares of American’s common stock for cash of $130,000 and a non-interest bearing promissory note of $200,000 (the “Note”), partially secured by American shares of common stock and by the guarantee of Daniel Dror, American’s Chief Executive Officer. A related treasury stock obligation in the amount of $200,000 was recorded. During 2014, the Company and the Wolinsky’s pursued litigation in connection with settling these obligations.

As of December 31, 2014, the Company owed Scott Wolinsky $131,081 pursuant to the promissory note. On April 24, 2015, The Company settled American International Industries, Inc. and Daniel Dror v. Scott and Maria Wolinsky. The Company agreed to pay the Wolinsky’s $155,461 for delivery of 17,940 of the Company’s shares. For the consideration given, both parties were released from any and all claims related to this matter. The Company recorded the $24,380 settlement obligation and reclassified the aggregate $155,461 obligation to accrued liabilities as of March 31, 2015. The Company paid the obligation in full in April 2015.

Guarantee Liability

During the year ending December 31, 2014, the Company’s subsidiary, NPI, entered into a revolving line of credit agreement secured by the assets of NPI and guaranteed by Daniel Dror and the Company. The balance owed by NPI under this line of credit was $1,512,542 as of December 31, 2014. The Company sold NPI during the three months ended March 31, 2015. The buyer of NPI has informed the Company that the Company’s obligation for this guarantee is $570,095 which the Company has recorded in accounts payable and accrued expenses.

Each of American's subsidiaries that have outstanding notes payable has secured such notes by that subsidiary’s property and equipment and is guaranteed by American.

~~(e)~~Note ~~AITP~~10 ~~sold~~- ~~its~~Capital ~~174~~Stock ~~acres~~and inStock ~~Waller County, Texas, which closed on July 25, 2014. The proceeds were used to pay the note in full.~~Options

Interest expense for the three and nine months ended September 30, 2014 and 2013 was $7,917, $123,211, $62,160, and $185,959, respectively.

Each of American's subsidiaries that have outstanding notes payable has secured such notes by that subsidiary’s inventory, accounts receivable, property and equipment and is guaranteed by American.

Note 12 - Capital Stock and Stock Options

American is authorized to issue up to 1,000,000 shares of Preferred Stock, $0.001 par value per share, of which 1,000 shares are presently outstanding. The Preferred Stock may be issued in one or more series, the terms of which may be determined at the time of issuance by the Board of Directors, without further action by stockholders, and may include voting rights (including the right to vote as a series on particular matters), preferences as to dividends and liquidation, conversion, redemption rights and sinking fund provisions.

During 2011, the Company issued to Daniel Dror, CEO, of 1,000 shares of the Company’s Series A Preferred Stock in exchange for his personal guarantee on certain loans of American.

The Series A Preferred Stock, as amended, has the right to vote in aggregate, on all shareholder matters votes equal to 30% of the total shareholder vote on any and all shareholder matters. The Series A Preferred Stock will be entitled to this 30% voting right no matter how many shares of common stock or other voting stock of American are issued or outstanding in the future. For example, if there are 10,000 shares of American’s common stock issued and outstanding at the time of a shareholder vote, the holder of the Series A Preferred Stock (Mr. Dror), voting separately as a class, will have the right to vote an aggregate of 4,286 shares, out of a total number of 14,286 shares voting. Additionally, American shall not adopt any amendments to American’s Bylaws, Articles of Incorporation, as amended, make any changes to the Certificate of Designations establishing the Series A Preferred Stock, or effect any reclassification of the Series A Preferred Stock, without the affirmative vote of at least 66-2/3% of the outstanding shares of Series A Preferred Stock.

American is authorized to issue up to 50,000,000 shares of Common Stock, $0.001 par value per share, of which 103,680 are reserved for issuance pursuant to the exercise of options pursuant to an employment agreement with American's Chairman and CEO.

OnDuring October 1, 2013, American entered into a stock purchase agreement with Scott Wolinsky, a former director of American, whereby American purchased Mr. Wolinsky’s 89,540 shares of American’s common stock for cash of $130,000 and a non-interest bearing note payable of $200,000, due on September 30, 2014. The Company has entered into an escrow agreement to resolve payment of the ~~amounts~~three ~~owed.~~months Aended ~~related~~March ~~treasury stock obligation in the amount of $200~~31,~~000~~ ~~was recorded. In the event that American is unwilling or not able to make the $200~~2015,~~000 payment when the note becomes due, at~~ American’s ~~option, it may instruct Wolinsky to sell the shares in the open market~~ and ~~apply~~its ~~the~~subsidiaries ~~proceeds~~issued ~~from such sales to any balance owed. In~~ the ~~event~~following ~~that Wolinsky sells the~~ shares ~~for~~as ~~more~~stock-based ~~than $200,000, Wolinsky shall return any portion of the unsold shares back to American and any proceeds over $200,000. As of September 30, 2014, 26,000 shares have been returned to the Company.~~compensation:

~~During~~American ~~the~~issued 20,000 shares ~~nine~~of ~~months~~common ~~ended~~stock ~~September~~valued ~~30,~~at ~~2014~~$17,000 ~~American~~for ~~and~~legal ~~its subsidiaries issued the following shares as stock-based compensation:~~fees.

American issued 105,000 shares of common stock valued at $174,~~900~~200 tofor ~~its~~legal ~~CEO as a bonus~~fees.

American issued 10,000 shares of common stock valued at $8,600 for director fees.

American repurchased 6,607 shares of common stock for $6,990 from third parties.

American repurchased and canceled 242,590 treasury shares canceling $243 of common stock and $242,347 of additional paid-in capital.

During the three months ended March 31, 2014, American and its subsidiaries issued the following shares as stock-based compensation:

American issued 10,000 shares of common stock valued at $17,900 to its CEO as a bonus and for being the personal guarantor on Company loans.

American issued 10,000 shares of common stock valued at $17,900 for consulting services.

American issued 10,000 shares of common stock valued at $17,900 for director fees.

American issued 18,000 shares of common stock valued at $25,920 for legal fees.

American issued 9,000 shares of common stock valued at $11,700 to employees for bonuses.

American issued 100,000 shares of common stock valued $124,000 to its CEO for being the personal guarantor on Company loans.

American issued 120,000 shares of common stock valued at $150,000 to a related party for acquisition of real estate.

Note 13 - Related Parties

Real estate – related party

On June 2, 2014, the Company and Daniel Dror II entered into an agreement whereby the Company agreed to purchase the remaining

~~50%~~Note ~~interest~~11 ~~in 96 acres in Galveston, Texas for $220,000 in cash, a $300,000 five~~-~~year~~ promissory note, and 120,000 shares of common stock valued at $150,000. The Company appraised the property at $1,220,000, which included a stock valuation of $700,000, but the Company valued the property at lower of cost or market of the related party of $670,000 or the cost basis of $720,385. Daniel Dror II is the son of Daniel Dror, American’s Chairman, Chief Executive Officer, and President. This property is recorded on the balance sheet as “Real estate held for sale” for $1,211,000 as of September 30, 2014. Related ~~party real estate transactions are recorded at lower of cost or market and the original cost of the contributors.~~Parties

~~Accounts~~As ~~payable~~of toMarch 31, 2015 and December 31, 2014, the Company owed related parties $131,124 and $235,124, respectively.

OnAs ~~February~~of ~~28,~~March ~~2013~~31, ~~Brenham~~2015 ~~leased~~and ~~394~~December ~~acres~~31, ~~in Galveston County for~~ 2014, the ~~acquisition~~Company ofowes ~~mineral rights for the Gillock Field from KDT and~~ Daniel Dror II ~~Trust of 2012 for~~ $300 ~~per acre~~, ~~or $131,100 and 200,~~000 ~~shares~~in ofconnection ~~American~~with ~~restricted~~real ~~common~~estate ~~stock.~~acquired ~~Brenham issued 3,326,316 shares of Brenham restricted common stock to American as payment~~ in ~~full for the 200,000 shares issued by American on Brenham’s behalf. The $131,100 is payable to KDT on or before December 30,~~ 2014.

InNote ~~addition,~~12 as- ofSale ~~September 30, 2014 and December 31, 2013, the Company owed other amounts to related parties~~ of $0Discontinued ~~and $2,212, respectively.~~Operations

~~Note~~During 14the -fourth ~~Segment~~quarter of ~~Information~~2014, the Company determined that it would cease all operations and sell its subsidiary, NPI. During the three months ended March 31, 2015, the Company completed the sale of NPI to Realamerica Corporation (“RC), a related party. RC paid the Company $10 for 100% of the shares of NPI.

The summarized operating results for discontinued operations is as follows:

	Three Months Ended March 31, 2015		Three Months Ended March 31, 2014
Revenues	$	—	$	1,187,773
Cost of revenues		—		(911,589	)
Selling, general and administrative		—		(490,268	)
Impairment of assets		—		—
Total costs and expenses		—		(7,434,225	)
Operating loss		—		(326,493	)
Other income (expenses):
Interest income		—		—
Interest expense		—		(38,463	)
Income tax expense		—		(1,374	)
Other expense		—		(6,975	)
Total other expenses		—		(46,812	)
Loss from discontinued operations	$	—	$	(260,896	)

Summary of assets and liabilities of discontinued operations is as follows:

	March 31, 2015		December 31, 2014
Current assets
Cash and cash equivalents	$	—	$	52,295
Accounts receivable, net		—		531,604
Inventories, net		—		1,473,363
Other current assets		—		39,579
Total current assets of discontinued operations	$	—	$	2,096,841

Non-current assets
Property and equipment, net	$	—	$	10,113
Patents, trademarks and tooling, net		—		144,283
Goodwill		—		254,798
Total non-current assets of discontinued operations	$	—	$	409,194

Current liabilities
Accounts payable and accrued expenses	$	—	$	492,395
Total current liabilities of discontinued operations	$	—	$	492,395

Long-term liabilities
Long-term debt	$	—	$	1,512,542
Deferred revenue		—		464,798
Other		—		36,300
Total long-term liabilities of discontinued operations	$	—	$	2,013,640

Note 13 - Segment Information

American International Industries, Inc. is a holding company and has the following reporting segments:

~~Northeastern~~American ~~Plastics~~International Holdings Corp. (~~"NPI"~~“AMIH”) - a ~~wholly-~~93.2% owned subsidiary, is a ~~supplier of automotive after~~non-~~market~~operating ~~products and consumer durable goods products to retailers and wholesalers in the automotive after-market and in the consumer durable electrical products markets~~company.

American International Holdings Corp. (“AMIH”), formerly Delta Seaboard International ("Delta") - a 93.2% owned subsidiary, was an onshore rig-based well-servicing contracting company providing services to the oil and gas industry. As of September 30, 2014, Delta Seaboard Well Service, Inc. ("DSWSI"), a Texas corporation and formerly a subsidiary of Delta, was a wholly-owned subsidiary of AMIH. On April 3, 2012, AMIH entered into an Asset Purchase Agreement to sell the operating assets and liabilities of DSWSI.

American International Texas Properties, Inc. ("AITP") - a wholly-owned real estate subsidiary, with real estate holdings in Harris, Galveston, and Waller Counties in Texas.

Brenham Oil & Gas ("BOG") - a 51.0% owned subsidiary that currently owns oil and gas properties. Through Brenham Oil & Gas, American is engaged in negotiations with financial institutions for the purpose of financing potential acquisitions of existing oil and gas properties and reserves. The Company is seeking to acquire a portfolio of oil and gas assets in North America and West Africa, and large oil concessions in West Africa.

Corporate overhead - American's investment holdings including financing current operations and expansion of its current holdings, as well as evaluating the feasibility of entering into additional businesses.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. American evaluates performances based on profit or loss from operations before income taxes, not including nonrecurring gains and losses and foreign exchange gains and losses. American's reportable segments are strategic business units that offer different technology and marketing strategies. Most of the businesses were acquired as subsidiaries and the management at the time of the acquisition was retained. American's areas of operations are principally in the United States. No single foreign country or geographic area is currently significant to the consolidated financial statements.

~~Consolidated~~Brenham ~~revenues~~Oil ~~from~~& ~~external~~Gas ~~customers,~~("BOG") ~~operating~~- ~~loss,~~a 51.0% ~~depreciation~~owned subsidiary that currently owns oil and ~~amortization~~gas ~~expense~~properties. Through BOG, American ~~interest~~is ~~expense,~~engaged ~~capital~~in ~~expenditures,~~negotiations with ~~non-cash~~financial ~~transactions,~~ institutions for the purpose of financing potential acquisitions of existing oil and gas properties and reserves. ~~identifiable~~The Company is seeking to acquire a portfolio of oil and gas assets ~~were~~in asNorth ~~follows:~~America and West Africa and large oil concessions in West Africa.

	For the Three Months Ended September 30,		For the Nine Months Ended September 30,
	2014	2013		2014	2013
Revenues:
Northeastern Plastics	$ 2,309,413	$ 2,680,571		$ 5,126,749	$ 5,188,652
Brenham Oil & Gas	9,016	11,186		25,080	27,908
AITP	-	3,526		-	13,472
Total revenues	$ 2,318,429	$ 2,695,283		$ 5,151,829	$ 5,230,032

Corporate overhead - American's investment holdings including financing current operations and expansion of its current holdings as well as evaluating the feasibility of entering into additional businesses.

Operating income (loss) from continuing operations:
Northeastern Plastics	$ 205,633	$ 99,347	$ (73,668)	$ (259,592)
AMIH	(37,939)	(34,153)	(97,582)	(108,797)
Brenham Oil & Gas	(50,744)	(74,194)	(154,376)	(612,773)
AITP	979,068	(8,649)	855,221	(82,211)
Corporate	(296,733)	(118,818)	(828,709)	(578,481)
Operating income (loss) from continuing operations	799,285	(136,467)	(299,114)	(1,641,854)
Other income (expense) from continuing operations	(287,943)	73,718	(54,695)	52,497
Net income (loss) from continuing operations	$ 511,342	$ (62,749)	$ (353,809)	$ (1,589,357)

Depreciation, depletion, accretion, and amortization:
Northeastern Plastics	$ 2,329	$ 22,294	$ 50,191	$ 65,488
Brenham Oil & Gas	645	28	2,266	195
Corporate	443	442	1,330	1,329
Total depreciation, depletion, accretion and amortization	$ 3,417	$ 22,764	$ 53,787	$ 67,012

Consolidated revenues from external customers, operating loss, depreciation and amortization expense, interest expense, capital expenditures, and identifiable assets were as follows:

	For the Three Months Ended September 30,			For the Nine Months Ended September 30,
		For the Three Months Ended March 31,
	2014	2013		2014	2013
		2015				2014
Interest Expense:
Revenues:
Northeastern Plastics	$ 53,703	$ 46,834		$ 125,049	$ 138,097
Brenham Oil & Gas		$	1,575			$	10,421
AITP	~~15,260~~	-	—	~~29,010~~	-		3,370
Corporate	773	15,326		30,971	47,862
Total revenues		$	1,575			$	13,791
Total interest expense	$ 69,736	$ 62,160		$ 185,030	$ 185,959
Operating income (loss) from continuing operations:
AMIH		$	—			$	(25,389	)
Brenham Oil & Gas			(62,985	)			(37,744	)
AITP			19,711				(50,085	)
Corporate			(832,358	)			(298,954	)

Capital Expenditures:
Operating loss from continuing operations			(872,632	)			(412,172	)
Northeastern Plastics	$ 12,258	$ 1,082		$ 36,139	$ 1,082
Other expense from continuing operations			(300,300	)			(75,074	)
Brenham Oil & Gas	230,000	-		250,000	87,500
Net loss from continuing operations		$	(1,175,932	)		$	(487,246	)
AITP	450,000	-		670,000
Total capital expenditures	$ 692,258	$ 1,082		$ 956,139	$ 88,582

	September 30, 2014	December 31, 2013
		For the Three Months Ended March 31,
Identifiable Assets:
		2015		2014
Northeastern Plastics	$ 5,218,957	$ 5,639,717
Interest Expense:
AMIH	103	-
AITP		$	21,244	$	3,125
Brenham Oil & Gas	442,245	193,432
Corporate			1,291		15,029
AITP	8,228,435	7,309,106
Total interest expense		$	22,535	$	18,154
Corporate	1,328,723	1,580,143
Total identifiable assets	$ 15,218,463	$ 14,722,398

Note 15 - Subsequent Events

	March 31, 2015		December 31, 2014
Identifiable Assets:
AMIH	$	305	$	120
Brenham Oil & Gas		186,422		435,441
AITP		7,755,877		8,127,326
Corporate		7		1,586,228
Total identifiable assets	$	8,900,011	$	10,149,115

OnNote ~~October~~14 1,- ~~2014,~~Subsequent ~~American approved the issuance of 3,000 shares of common stock valued at $3,480 for legal fees.~~Events

On ~~October~~April 324, ~~2014~~2015, The Company settled American International Industries, ~~approved~~Inc. and Daniel Dror v. Scott and Maria Wolinsky. The Company agreed to pay the ~~issuance 5~~Wolinsky’s $155,~~000~~461 ~~shares~~for delivery of ~~common~~17,940 ~~stock~~of ~~valued~~the atCompany’s own shares to settle the lawsuit in full. The Company recorded an additional $524,~~500~~380 obligation in connection with this settlement agreement and reclassified the $155,461 obligation in aggregate to ~~employees~~accrued ~~for~~liabilities ~~bonuses~~as of March 31, 2015. The $155,461 obligation was paid in full in April 2015.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Forward-Looking Statements; Market Data

As used in this Quarterly Report, the terms "we", "us", "our". "American" and the "Company" means American International Industries, Inc., a Nevada corporation, and its subsidiaries. To the extent that we make any forward-looking statements in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report, we emphasize that forward-looking statements involve risks and uncertainties and our actual results may differ materially from those expressed or implied by our forward-looking statements. Our forward-looking statements in this Quarterly Report reflect our current views about future events and are based on assumptions and are subject to risks and uncertainties. Generally, forward-looking statements include phrases with words such as "expect", "anticipate", "intend", "plan", "believe", "seek", "estimate" and similar expressions to identify forward-looking statements.

Overview

American International Industries, Inc., organized under the laws of the State of Nevada in September 1994, is a diversified corporation with interests in industrial companies, oil and gas interests, oilfield supply and service companies, and interests in undeveloped real estate in the Galveston Bay, Texas area. The Company’s business strategy is to acquire controlling equity interests in undervalued companies and take an active role in its new subsidiaries to improve their growth, by providing its subsidiaries with access to capital, leveraging synergies and providing its subsidiaries with the Company's management expertise.

American International Industries, Inc. is a holding company and has four reporting segments and corporate overhead:

Northeastern Plastics ("NPI") - a wholly-owned subsidiary, is a supplier of automotive after-market products and consumer durable goods products to retailers and wholesalers in the automotive after-market and in the consumer durable electrical products markets;

American International Holdings Corp. (“AMIH”), formerly Delta Seaboard International ("Delta") a 93.2% owned subsidiary, was an onshore rig-based well-servicing contracting company providing services to the oil and gas industry. Delta Seaboard Well Service, Inc. ("DSWSI"), a Texas corporation was a wholly-owned subsidiary of AMIH. On April 3, 2012, AMIH sold the operating assets and liabilities of DSWSI.

American International Texas Properties, Inc. ("AITP") - a wholly-owned real estate subsidiary, with real estate holdings in Harris, Galveston, and Waller Counties in Texas.

Disposal of Business Unit

Northeastern Plastics, Inc. (NPI), a Texas corporation, was a wholly-owned subsidiary of the Company. NPI was a supplier of products to retailers and wholesalers in the automotive after-market and in the consumer durable electrical products markets. NPI was located at 14221 Eastex Freeway, Houston, Texas 77032.

In the fourth quarter of 2014, the Company determined that it would cease all operations and sell its subsidiary, NPI. As a result, the Company has identified the assets and liabilities of the NPI subsidiary as assets and liabilities held for sale at December 31, 2014. Results of operations for NPI have been segregated and presented as discontinued operations for the period ended March 31, 2014 for comparative purposes.

Products and Services

NPI's diversified products were sold in the automotive and consumer retail and after-market channels. NPI marketed its diversified product assortment under the Good Choice® and MOTOR TREND® brand names.

The NPI MOTOR TREND® branded products included a variety of booster cables, portable and rechargeable hand lamps, lighting products, cord sets, and miscellaneous battery and other consumer automotive accessories. The NPI MOTOR TREND® program was supported through a national advertising campaign in MOTOR TREND® magazine and additional brand advertising through MOTOR TREND® Radio and MOTOR TREND® TV.

The NPI Good Choice® branded product assortment not only matches in depth but exceeds the NPI MOTOR TREND® branded product assortment. In addition, the vast majority of the Good Choice® product line has been tested at the Good Housekeeping Institute and prominently carries the Good Housekeeping "Seal" on many of its products. The NPI Good Choice® product assortment includes a variety of portable lighting products, cord sets, residential household light bulbs, night lights, multiple outlet devices and other consumer products.

NPI products were available at stores such as Family Dollar, Dollar Tree, Ocean State Jobbers, Auto Zone, Bi-Mart, and Straus Auto, among others.

Virtually all of NPI's products were manufactured overseas.

Our Properties

Brenham holds oil and gas leases interests in Texas.

Victoria County, Texas

On January 16, 2014, Brenham acquired a 332-acre oil and gas lease, the "Inez Field Prospect," located in Victoria County, Texas. Exploration has not yet commenced, and the property is in the process of being sold. However, there can be no assurance that a sale will take place. Further, Brenham acquired #1 Roberts Unit well-bore, as well as all the equipment down-hole and surface equipment associated therewith. Brenham acquired 100% of the working interest and a net revenue interest of 74%. In January 1990, Ken Petroleum Corporation drilled and completed the #1 Roberts Unit in the Inez (8,600') Field in Victoria County, Texas. The well was initially completed in the Yegua "B" between 8498-8510' and flowed 2,668 MCFGPD on an 8/64" choke. In February 1990, Stuart Petroleum Testers performed a Full Scale Separator Test, and it was determined that the Roberts well had a potential of 9,000 MCFGPD and 65.14 barrels of 48° API condensate during the 4-point test. The well later encountered mechanical problems and has since been shut-in.

Brenham plans to side track or drill a new well to regain production from the well in the Yegua. Reserves are estimated to be 4 billion cubic feet of gas and 160,000 barrels of condensate per well from the Yegua. Brenham can drill 3-4 wells on the lease.

The secondary objective is the over-pressured Jackson Shale interval from 6,000 ft. to 8,000 ft., which tested gas from a 40 ft. perforated interval. In the new well to be drilled in the Yegua, Brenham plans to core several intervals in the Jackson Shale to conduct a petro physical study.

20In January 2015, the Company elected not to pursue this opportunity and allowed the option agreement to expire.

Pierce Junction Field - Houston, Texas

The Pierce Junction Field includes eight producing wells, with an additional seven wells scheduled for mechanical work-over that should add more oil reserves. The wells currently have production of 30 barrels per day. Additional offsetting acreage can be developed by Brenham on a well by well basis to produce additional oil reserves from several producing horizons. Presently, Brenham is seeking to acquire additional working interests in this field from the other partners. The Company also is developing a plan to undertake a comprehensive work over program to increase production in the field to approximately 100 barrels per day.

Gillock Field - Galveston County, Texas

Gillock Fields are segments of a large, complexly faulted deep seated salt dome. Brenham purchased 4 square miles of 3D seismic data for the purpose of completion of its drilling program in this field. A preliminary review of the reprocessed 3D seismic data shows numerous fault traps and amplitude bright spots normally associated with hydrocarbon production at both the Frio and deeper Vicksburg level. Additionally, structural rollover indicative of a hydrocarbon trap is also present in shallower horizons as well. As there are well over 20 pay zones in Gillock Field, the possibility of shallower pay would not be a surprise and all of the aforementioned anomalies are being carefully investigated and evaluated by our experienced geophysical team. The 3D seismic data in conjunction with adjacent and nearby production will enable Brenham to pick precise drillable locations in the Frio as well as providing Brenham the opportunity to upgrade the reserve category of the Vicksburg Formation, thereby enhancing the value of the Company.

Washington County, Texas

Since November 7, 1997 (inception), Brenham Oil & Gas Inc. has owned an oil and gas mineral royalty interest on a 24-acre parcel of land located in Washington County, Texas. The royalty interest is currently leased by Anadarko Petroleum Corporation for a term continuing until the covered minerals are no longer produced in paying quantities from the leased premises.

Refer to the tables related to proved oil and gas reserves, together with the changes therein, proved developed reserves, and proved undeveloped reserves for the years ended December 31, ~~2013~~2014 and ~~2012~~2013 in the audited consolidated financial statements and notes thereto contained in Brenham’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, ~~2013~~2014.

We intend to continue our efforts to grow through the acquisition of additional and complementary businesses and by expanding the operations of our existing businesses, especially in the energy sector. We will evaluate whether additional and complementary businesses can be acquired at reasonable terms and conditions, at attractive earnings multiples and which present opportunity for growth and profitability. These efforts will include the application of improved access to financing and management expertise afforded by synergistic relationships between the Company and its subsidiaries. Potential acquisitions are evaluated to determine that they would be accretive to earnings and equity, that the projected growth in earnings and cash flows are attainable and consistent with our expectations to yield desired returns to investors, and that management is capable of guiding the growth of operations, working in concert with others in the group to maximize opportunity. Periodically as opportunities present themselves, we may sell or merge the subsidiaries in order to bring value to the holding company and our shareholders and to enable the Company to acquire larger companies.

The Company’s real estate investment policy historically has been to acquire real estate for resale based upon our view of market conditions. Such properties are listed on the balance sheet as real estate acquired for resale. Real estate is not a segment of the Company's business.

We expect to face competition for acquisition candidates, which may limit the number of acquisition opportunities and may lead to higher acquisition prices. There can be no assurance that we will be able to identify, acquire or manage profitably of additional businesses or to integrate any acquired businesses into the Company without substantial costs, delays or other operational or financial problems. Further, acquisitions involve a number of risks, including possible adverse effects on our operating results, diversion of management's attention, failure to retain key personnel of the acquired business and risks associated with unanticipated events or liabilities. Some or all of which could have a material adverse effect on our business, financial condition and results of operations. The timing, size and success of our acquisition efforts and the associated capital commitments cannot be readily predicted. It is our current intention to finance future acquisitions by using shares of our common stock and other forms of financing as the consideration to be paid. In the event that the common stock does not have and maintain a sufficient market value, or potential acquisition candidates are otherwise unwilling to accept common stock as part of the consideration for the sale of their businesses, we may be required to seek other forms of financing in order to proceed with our acquisition program. If we do not have sufficient cash resources, our growth could be limited unless we are able to obtain additional equity or debt financing at terms acceptable to the Company.

Corporate overhead includes our investment activities for financing current operations and expansion of our current holdings, as well as evaluating the feasibility of acquiring additional businesses.

Results of Operations

Three Months Ended September 30, 2014 Compared to the Three Months Ended September 30, 2013

The following is derived from, and should be read in conjunction with, our unaudited consolidated financial statements, and related notes for the three months ended September 30, 2014 and 2013.

Net revenues. Revenues from continuing operations were $2,318,429 for the three months ended September 30, 2014, compared to $2,695,283 for the three months ended September 30, 2013, representing a decrease of $376,854, or 14%. NPI's revenues, which comprised the majority of the change, decreased by $371,158, or 14%, to $2,309,413 for the three months ended September 30, 2014, compared to $2,680,571 for the same period in the prior year, due to change in the product mix comprising sales in the current period. For the three months ended September 30, 2014 and 2013, Brenham's revenues were $9,016 and $11,186, respectively. For the three months ended September 30, 2014 and 2013, AITP's revenues were $0 and $3,526, respectively.

Cost of sales and margins. Cost of sales for the three months ended September 30, 2014 was $1,921,545, compared to $2,094,948 for the three months ended September 30, 2013. NPI’s cost of sales and related revenues comprised the majority of the change. The decrease was due to a decrease in transportation charges and the effect of the weakening of the U.S. dollar to the Renminbi of the People's Republic of China.

Selling, general and administrative. Consolidated selling, general and administrative expenses for the three months ended September 30, 2014 were $1,088,690, compared to $736,802 in the prior year, representing an increase of $351,888, or 48%. General and administrative expenses for the three months ended September 30, 2014 decreased from the same period in the prior year primarily due to lower compensation and related expenses for NPI and the corporate office.

Gain (loss) from sale of assets. We had a gain on sale of assets of $1,491,091 for the three months ended September 30, 2014, compared to $-0- for the three months ended September 30, 2013. This increase resulted from a gain on sale of real estate as well as the current period amortization of deferred revenue.

Income (loss) from operations. We had an operating income of $799,285 for the three months ended September 30, 2014, compared to an operating loss of $136,467 for the three months ended September 30, 2013, which represented an increase of $935,752, due to the aforementioned activities.

Total other income (expense). Total other expenses were $287,943 for the three months ended September 30, 2014, compared total other income of $73,718 for the three months ended September 30, 2013. Other expenses for the three months ended September 30, 2014 included non-cash unrealized losses on trading securities of $160,295, compared to gains of $46,615 for the three months ended September 30, 2013. Realized gains on trading securities for the three months ended September 30, 2014 were $90,912, compared to gains of $67,679 for the three months ended September 30, 2013. Interest expense was $69,736 during the three-month period ended September 30, 2014, compared to $62,160 during the same period in the prior year.

Net income (loss). We had a net income from operations of $536,639, or $0.25 per share, for the three months ended September 30, 2014, compared to a net loss of $65,584, or $0.01 per share, for the three months ended September 30, 2013.

Nine Months Ended September 30, 2014 Compared to the Nine Months Ended September 30, 2013

The following is derived from, and should be read in conjunction with, our unaudited consolidated financial statements, and related notes for the nine months ended September 30, 2014 and 2013.

Net revenues. Revenues from continuing operations were $5,151,829 for the nine months ended September 30, 2014, compared to $5,230,032 for the nine months ended September 30, 2013, representing a decrease of $78,203, or 1%. NPI's revenues, which comprised the majority of the change, decreased by $61,903, or 1%, to $5,126,749 for the nine months ended September 30, 2014, compared to $5,188,652 for the same period in the prior year, due to a change in the product mix comprising sales in the current period. For the nine months ended September 30, 2014 and 2013, Brenham's revenues were $25,080 and $27,908, respectively. For the nine months ended September 30, 2014 and 2013, AITP's revenues were $0 and $13,472, respectively.

Cost of sales and margins. Cost of sales for the nine months ended September 30, 2014 was $4,041,902, compared to $3,989,689 for the nine months ended September 30, 2013. Our gross margins were relatively unchanged between the nine months ended September 30, 2014.

Selling, general and administrative. Consolidated selling, general and administrative expenses for the nine months ended September 30, 2014 were $2,879,053, compared to $2,843,651 in the prior year, representing an increase of $35,402, or 1%. General and administrative expenses for the nine months ended September 30, 2014 increased from the same period in the prior year primarily due to higher compensation and related expenses for NPI and the corporate office.

~~Gain~~Results ~~(loss) from sale~~ of assets. We had a gain on sale of assets of $1,470,012 for the nine months ended September 30, 2014, compared to a loss of $38,546 for the nine months ended September 30, 2013. This increase resulted from a gain on sale of real estate as well as the current period amortization of deferred revenue.Operations

~~Loss~~Three Months ~~from~~Ended March ~~operations. We had an operating loss of $299~~31,~~114~~ ~~for the nine months ended September 30, 2014, compared~~ 2015 Compared to ~~$1,641,854 for~~ the ~~nine~~Three ~~months~~Months ~~ended~~Ended ~~September~~March 3031, ~~2013, which represented a decrease of $1,342,740, or 82%, due to the aforementioned activities.~~2014

~~Total~~The ~~other~~following ~~income~~is ~~(expense). Total~~derived ~~other income was $54~~from,~~695~~ ~~for~~and ~~the~~should ~~nine~~be read ~~months~~in ~~ended~~conjunction ~~September 30~~with, ~~2014,~~our ~~compared~~unaudited toconsolidated ~~total~~financial ~~other income of $52~~statements,~~497~~ ~~for~~and ~~the~~related ~~nine~~notes ~~months ended September 30, 2013. Other expenses~~ for the ~~nine~~three months ended ~~September~~March 3031, 2015 ~~2014~~and included non-cash unrealized losses on trading securities of $213,143 compared to losses of $41,708 for the nine months ended September 30, 2013. Realized losses on trading securities for the nine months ended September 30, 2014 ~~were $41,494, compared to gains of $200,306 for the nine months ended September 30, 2013~~. ~~Interest expense was $185,030 during the nine-month period ended September 30, 2014, compared to $185,959 during the same period in the prior year.~~

Net ~~loss~~revenues. We ~~had~~Revenues ~~a net loss~~ from continuing operations ofwere $~~346~~1,~~963~~575 for the three months ended March 31, or2015, ~~$0.12~~compared ~~per~~to ~~share~~$13,791 for the ~~nine~~three months ended ~~September~~March 3031, 2014, representing a ~~compared~~decrease toof $112,~~598~~216,~~312,~~ or 89%. For the three months ended March 31, 2015 and 2014, Brenham's revenues were $~~0.71 per~~1,575 ~~share~~and $10,421, ~~for~~respectively. For the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2015 and 2014, AITP's revenues were $0 and $3,370, respectively.

Selling, general and administrative. Consolidated selling, general and administrative expenses for the three months ended March 31, 2015 were $875,178, compared to $415,347 for the period ended March 31, 2014, representing an increase of $459,831, or 111%. General and administrative expenses for the three months ended March 31, 2015 increased from the same period in the prior year primarily due to costs associated with its contingent obligation.

Gain (loss) from sale of assets. We had a gain on sale of real estate of $971 for the three months ended March 31, 2015, compared to $0 for the three months ended March 31, 2014.

Loss from operations. We had an operating loss of $872,632 for the three months ended March 31, 2015, compared to an operating loss of $412,172 for the three months ended March 31, 2014, which represented an increase of $460,460, due to the aforementioned activities.

Total other income (expense). Total other expenses were $303,300 for the three months ended March 31, 2015, compared total other expenses of $75,074 for the three months ended March 31, 2014. Other expenses for the three months ended March 31, 2015 included non-cash unrealized losses on trading securities of $218,288, compared to $74,182 for the three months ended March 31, 2014. Realized losses on trading securities for the three months ended March 31, 2015 were $119,202, compared to gains of $12,555 for the three months ended March 31, 2014. Interest expense was $22,535 during the three-month period ended March 31, 2015, compared to $18,154 during the same period in the prior year.

Net loss. We had a net loss attributable to the Company of $1,1,43,178, or $0.47 per share, for the three months ended March 31, 2015, compared to a net loss of $708,318, or $0.33 per share, for the three months ended March 31, 2014.

Liquidity and Capital Resources

Liquidity is our ability to generate sufficient cash flows to meet the Company’s obligations and commitments, or obtain appropriate financing. Currently, our liquidity needs arise primarily from working capital requirements, debt service on indebtedness, and capital expenditures. We have funded these liquidity requirements from debt financing and proceeds from notes receivable.

Capital expenditures for the nine months ended September 30, 2014 were $956,139, compared to $88,582 for the same period in the prior year. The Company has no major capital expenditure commitments for the next 12 months.

The Company's prospects for selling real estate from its portfolio have improved significantly due to infrastructure developments in close proximity to these properties. Management believes that demand and prices for real estate will increase during the next 12 months from the date of this report. The appraised values of the Company's portfolio of real estate are significantly higher than the value recorded on the books.

We believe that our cash on hand, ~~operating cash flows~~ and credit facilities will be sufficient to fund our operations, service our debt, and fund planned capital expenditures for at least 12 months from the date of this report.

At ~~September~~March 3031, ~~2014~~2015, the consolidated working capital was $65,~~825~~725,~~568~~875. We had consolidated current assets and current liabilities of $117,~~085~~914,~~076~~846 and $42,~~259~~232,~~508~~971, respectively at March ~~September 30~~31, ~~2014~~2015.

Cash flow from operating activities. ~~Net~~ Net cash used in operating activities was $1,~~045~~159,~~996~~439 for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015, compared to $~~916~~515,~~325~~243 for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014. Net cash ~~provided~~used byin operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 was derived primarily from our net loss from ~~continuing~~ operations of $~~346,963, and a gain on sale of assets of $~~1,~~470~~175,~~012, an increase in accounts payable of $457,174, as well as an increase in inventory of $119,701~~932. ~~Inventory~~ increased during the nine months ended September 30, 2014 in order to address an increase in existing customer account organic growth in both the traditional retail and grocery distribution networks. The Company sold real estate during the nine months ended September 30, 2014, resulting in a gain on sale. Net cash used in operating activities for the ~~nine~~three months ended March ~~September 30~~31, ~~2013~~2014 was principally derived from our net loss from continuing operations of $1472,~~598,312, which included non-cash expenses of $390,083, including depreciation, depletion, accretion, and amortization of $67,012 and share-based compensation of $342,880~~617.

Cash flow from investing activities. ~~For~~ For the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015, our investing activities provided cash of $23,~~202~~366,~~372~~957 primarily as a result of proceeds from sale of ~~assets~~real estate of $21,~~537~~662,~~924~~500 and proceeds from ~~trading~~notes ~~securities~~receivable of $32,~~332~~000,~~574~~715. For the ~~nine~~three months ended ~~September~~March 3031, 2014 ~~and 2013~~, our investing activities ~~provided~~used cash of $~~837~~89,293, primarily as a result of proceeds from notes receivable of $820,221, sales of trading securities of $209,187, offset by purchases of trading securities of $44,090, and the purchase of oil and gas properties of $87,500524.

Cash flow from financing activities. ~~Our~~ Our financing activities used cash of $1288,~~171,357~~114 during the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015, primarily due to principal payments of debt of $2318,~~239,620, which was offset by borrowings of $638,993~~910. For the ~~nine~~three months ended ~~September~~March 3031, 2014 ~~and 2013~~, our financing activities ~~used~~provided cash of $1289,~~120~~257, primarily as a result of ~~payments on debt of $186,121, and a reduction in bank overdrafts of $61,272, offset by~~ proceeds from the ~~sale~~issuance of ~~common~~debt ~~stock~~ of ~~a subsidiary of~~ $~~100~~300,000~~, net borrowings under line of credit agreements of $122,094, and proceeds from stock subscription receivables of $55,500~~.

Off-Balance Sheet Arrangements

As of ~~September~~March 3031, ~~2014~~2015, we did not have any off-balance sheet arrangements.

2324

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Not applicable.

ITEM 4T. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. Under the supervision and the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation as of ~~September~~March 3031, ~~2014~~2015 of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of ~~September~~March 3031, ~~2014~~2015. Such conclusion reflects the 2013 departure of our chief financial officer and assumption of duties of principal financial officer by an interim chief financial officer and the resulting lack of accounting expertise of our now principal financial officer and a lack of segregation of duties. Until we are able to remedy these material weaknesses, we are relying on third party consultants and our accounting firm to assist with financial reporting.

Changes in internal controls. No change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) occurred during the quarter ended ~~September~~March 3031, ~~2014~~2015, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

There have been no material changes from Risk Factors as previously disclosed in the Registrant’s annual report for the year ended December 31, ~~2013~~2014.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.

Exhibit No.	~~Description~~	Description
31.1	~~Certification of CEO Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002~~	Certification of CEO Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002
31.2	~~Certification of CFO Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002~~	Certification of CFO Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002
32.1	~~Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002~~	Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
32.2	~~Certification of CFO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002~~	Certification of CFO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

/s/ Daniel Dror CEO and Chairman Dated: August 10, 2015 /s/ Charles R. Zeller Interim CFO and Director Dated: August 10, 2015

~~CEO and Chairman~~26

Dated: November 19, 2014

/s/ Charles R. Zeller

Interim CFO and Director

Dated: November 19, 2014

CERTIFICATIONS

I, Daniel Dror, certify that:

1. I have reviewed this quarterly report of American International Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 19, 2014

/s/ Daniel Dror

CEO and Chairman

CERTIFICATIONS

I, Charles R. Zeller, certify that:

1. I have reviewed this quarterly report of American International Industries, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 19, 2014

/s/ Charles R. Zeller

Interim CFO and Director

Statement Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

The undersigned, Daniel Dror, CEO and Chairman of American International Industries, Inc., a Nevada corporation, hereby makes the following certification as required by Section 906(a) of the Sarbanes-Oxley Act of 2002, with respect to the following of this report filed pursuant to Section 15(d) of the Securities Exchange Act of 1934: Quarterly Report of Form 10-Q for the period ended September 30, 2014.

The undersigned certifies that the above annual report fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, and information contained in the above quarterly report fairly presents, in all respects, the financial condition of American International Industries, Inc. and results of its operations.

Date: November 19, 2014

Daniel Dror

CEO and Chairman

/s/ Daniel Dror

Statement Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

The undersigned, Charles R. Zeller, Interim CFO of American International Industries, Inc., a Nevada corporation, hereby makes the following certification as required by Section 906(a) of the Sarbanes-Oxley Act of 2002, with respect to the following of this report filed pursuant to Section 15(d) of the Securities Exchange Act of 1934: Quarterly Report of Form 10-Q for the period ended September 30, 2014.

Date: November 19, 2014

Charles R. Zeller

Interim CFO and Director

/s/ Charles R. Zeller

Filing Compare · AMERICAN INTERNATIONAL INDUSTRIES INC