NOTES
TO FINANCIAL STATEMENTS - UNAUDITED
September
30, 2020
Note
1 - Organization and Basis of Presentation
Organization
and Line of Business
AmeraMex
International, Inc., (the “Company”) was incorporated on May 29, 1990 under the laws of the state of Nevada. The Company
sells, leases and rents new and refurbished heavy equipment primarily in the U.S. The Company operates under the name of Hamre
Equipment.
Note
2 – Summary of Significant Accounting Policies
Liquidity
Considerations
At
September 30, 2020, the Company had working capital of approximately $5,200,000. On May 1, 2020, the Company received a
Paycheck Protection Program Loan in the amount of $228,442 to cover payroll and utility expenses during the COVID-19
pandemic. The Company believes it is following the government guidelines and tracking costs to ensure 100% forgiveness of the
loan. The Company is expecting to receive said forgiveness before the end of the year.
On
April 21, 2020, the Company was approved and received a $10,000 advance on an SBA Loan for $2,000,000. The Company received a
second payment of $150,000 on September 10, 2020. The SBA loans bears 3.75% interest for a 30 year term with the first 12
months of payments deferred. Remaining funding on this loan is anticipated over the next 24 months.
The Company
received an increase of one of their equipment lines of credit from $500,000 to $1,050,000.
Moving
forward, the Company expects to generate sufficient cash flows from operations to meet its obligations, and expects to
continue to obtain financing for equipment purchases in the normal course of business. The Company believes that its expected
cash flows from operations, together with its current credit facility, will be sufficient to operate in the normal course of
business for the next 12 months from the issuance date of these financial statements.
Risks
and Uncertainties
In
March 2020, the World Health Organization declared a novel strain of coronavirus (“COVID-19”) a pandemic, as a
result of which the Company is subject to additional risks and uncertainties. In response to the pandemic, governments and
organizations have taken preventative or protective actions, such as temporary closures of non-essential businesses and
“shelter-at-home” guidelines for individuals. As a result, the global economy has been negatively affected, and
the Company’s business has been negatively affected in a number of ways. The Company has had several large transactions
that have been put on hold until the State of California is completely reopened. In addition, the Company has all sales,
administrative and account employees working from home. Shop employees are practicing social distancing and only one customer
is allowed in the facility at a time. Most directly, a number of states and local governments have taken steps that have
prohibited or curtailed the sale of equipment or curtailed construction activities during the pandemic. In some
jurisdictions, shelter-at-home orders, or other orders related to the pandemic, have impeded and continue
to impede equipment sales. The severity of the
impact of COVID-19 on the Company’s business will depend on a number of factors, including, but not limited to, the
duration and severity of the pandemic and the extent and severity of the impact on the Company’s customers, all of
which are uncertain and cannot be predicted. The Company’s future results of operations and liquidity could be
adversely impacted by delays in payments of outstanding receivable amounts beyond normal payment terms. Given the dynamic
nature of this situation, the Company cannot predict with absolute certainty, the ultimate impact of COVID-19 on its financial
condition, results of operations or cash flows.
Basis
of Presentation
The
unaudited interim financial statements and related notes have been prepared in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, within the
rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information
and disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been
condensed or omitted pursuant to such rules and regulations. The unaudited interim financial statements have been prepared on
a basis consistent with the audited financial statements and in the opinion of management, reflect all adjustments,
consisting of only normal recurring adjustments, necessary for the fair presentation of the results for the interim periods
presented and of the financial condition as of the date of the interim balance sheet. The financial data and the other
information disclosed in these notes to the interim financial statements related to the three and nine-month periods are
unaudited. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited
interim financial statements should be read in conjunction with the financial statements of the Company for the year ended
December 31, 2019 and notes thereto that are included in the Company’s Annual Report on Form
10-K.
AMERAMEX
INTERNATIONAL, INC.
NOTES
TO FINANCIAL STATEMENTS - UNAUDITED
September
30, 2020
Use
of Estimates
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions.
These
estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. It is possible that accounting estimates and assumptions may be material to the Company
due to the levels of subjectivity and judgment involved. Significant estimates in these unaudited interim financial statements
include the allowance for doubtful accounts, inventory allowances, convertible notes policy and estimated useful life of property
and equipment.
Convertible
Debt and Embedded Derivatives
Convertible
debt is accounted for under the guidelines established by Accounting Standards Codification (“ASC”) 470-20, Debt
with Conversion and Other Options. ASC 470-20 governs the calculation of an embedded beneficial conversion, a derivative instrument,
which is treated as an additional discount to the instruments where derivative accounting does not apply. This applies during
the period for which embedded conversion features are either fixed, contingently convertible, or cash or net settlement is in
control of the Company. The proceeds allocated to the equity instruments may reduce the carrying value of the convertible debt,
and such discount is amortized to interest expense over the term of the debt. The Company generally has the option to pay the
convertible notes at a premium ranging from 0% to 135% within the first 180 before they become convertible. The discount relating
to the initial recording of the original issue discounts, issue costs, warrants and beneficial conversion feature are accreted,
together with the premium, over the estimated term of the debt, which is generally 180 days from the date of issuance.
Many
of the conversion features embedded in the Company’s notes become variable upon the event of default or upon the passage
of time in the event the Company does not repay the notes, at a premium, at 180 days from issuance of the note. If the conversion
price is adjusted based on a discount to the market price of the Company’s common stock, the number of shares upon conversion
is potentially unlimited. In the event we cannot control the net share settlement and cash settlement, we record the embedded
conversion feature as a derivate instrument, at fair value. The excess of fair value of the embedded conversion feature, together
with the original issue discounts, warrants, and issue costs over the face value of the debt, is recorded as an immediate charge
in the accompanying statements of operations and cash flows. Each reporting period, the Company will compute the estimated fair
value of derivatives and record changes to operations. The discounts are accreted over the term of the debt, which is generally
six (6) months after the notes become convertible, using the effective interest method.
ASC
470-50, Extinguishments, require entities to record an extinguishment when the terms of the original note are significantly
modified, defined as a greater than 10% change in expected cash flows. As a result of modifications made to one of the Company’s
convertible notes during the reporting period, we recorded a loss as reported in the accompanying statements of operations and
cash flows.
Line
of Credit Issuance Costs
The
Company capitalizes and amortizes direct issue costs incurred in connection with its line of credit arrangement. On or about
March 30, 2019 (see Note 6), the Company incurred $245,000 in costs comprised of originations fees totaling approximately
$180,000 and appraisal costs of approximately $65,000. These costs are amortized on a straight-line basis over the term of
the debt. Included in Other Assets in the accompanying balance sheet at September 30, 2020 are unamortized loan fees of
$116,390. During the three and nine months ended September 30, 2020 and 2019, the Company amortized $20,417, $61,250 and
$16,129, $34,531 in loan fees, respectively.
Recent
Accounting Pronouncements
In
February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) which supersedes
ASC Topic 840, Leases. ASU 2016-02 requires lessees to recognize a right-of-use asset and a lease liability on their balance sheets
for all leases with terms greater than 12 months. Based on certain criteria, leases will be classified as either financing
or operating, with classification affecting the pattern of expense recognition in the income statement. For leases with a term
of 12 months or less, a
AMERAMEX
INTERNATIONAL, INC.
NOTES
TO FINANCIAL STATEMENTS - UNAUDITED
September
30, 2020
lessee is permitted to make an accounting
policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election,
it should recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective
for fiscal years beginning after December 15, 2020 for smaller reporting companies, and interim periods within those years, with
early adoption permitted. The Company will adopt this new standard on January 1, 2021. In transition, lessees and lessors are required
to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. In
July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements” that allows entities to apply
the provisions of the new standard at the effective date, as opposed to the earliest period presented under the modified retrospective
transition approach and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of
adoption. The modified retrospective approach includes a number of optional practical expedients primarily focused on leases that
commenced before the effective date of Topic 842, including continuing to account for leases that commence before the effective
date in accordance with previous guidance, unless the lease is modified. The Company currently expects that most of its operating
lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon
its adoption of Topic 842, which will increase the total assets and total liabilities that the Company reports relative to such
amounts prior to adoption.
Note
3 – Inventory
Inventory
as of September 30, 2020 and December 31, 2019 consisted of the following:
|
|
September
30, 2020
|
|
December
31, 2019
|
Parts and supplies
|
|
$
|
381,907
|
|
|
$
|
250,720
|
|
Heavy equipment
|
|
|
7,310,309
|
|
|
|
4,581,563
|
|
Total
|
|
$
|
7,692,216
|
|
|
$
|
4,832,283
|
|
All
of the inventory is used as collateral for the line of credit and notes payable (see Notes 6 and 8).
Note
4 – Property and Equipment
Property
and equipment includes assets held for internal use; as of September 30, 2020 and December 31, 2019, such consisted of the following:
|
|
September
30, 2020
|
|
December
31, 2019
|
Furniture and fixtures
|
|
$
|
100,596
|
|
|
$
|
100,596
|
|
Leasehold improvements
|
|
|
467,188
|
|
|
|
467,188
|
|
Vehicles and Equipment
|
|
|
1,619,191
|
|
|
|
1,483,701
|
|
Total, at cost
|
|
|
2,186,975
|
|
|
|
2,051,485
|
|
Less - Accumulated depreciation
|
|
|
(1,083,123
|
)
|
|
|
(871,691
|
)
|
Total, Net
|
|
$
|
1,103,852
|
|
|
$
|
1,179,794
|
|
Depreciation
expense for the three and nine months ended September 30, 2020 and 2019 was $72,681, $211,433 and $56,819, $146,737, respectively.
All
of the property and equipment is used as collateral for the line of credit and notes payable (see Notes 6 and 8).
AMERAMEX
INTERNATIONAL, INC.
NOTES
TO FINANCIAL STATEMENTS - UNAUDITED
September
30, 2020
Note
5 – Rental Equipment
Rental
equipment as of September 30, 2020 and December 31, 2019 consisted of the following:
|
|
September
30, 2020
|
|
December
31, 2020
|
Rental equipment
|
|
$
|
6,769,813
|
|
|
$
|
6,974,953
|
|
Less - Accumulated depreciation
|
|
|
(3,682,583
|
)
|
|
|
(2,938,341
|
)
|
Total, Net
|
|
$
|
3,087,230
|
|
|
$
|
4,036,612
|
|
|
|
|
|
|
|
|
|
|
Depreciation
expense for the three and nine months ended September 30, 2020 and 2019 was $246,845, $744,242 and $240,518, $712,240, respectively.
All
of the rental equipment is used as collateral for the line of credit and notes payable (see Notes 6 and 8).
Note
6 – Lines of Credit
On
May 22, 2020, the limit on the line of credit with a finance company that provides for borrowing up to $500,000 was increased
to $1,050,000. The line of credit is secured by the equipment purchased and is interest free if paid within 180 days from the
finance date. After the applicable free interest period, interest calculates as follows: 30 day LIBOR plus 6.75% - rate after
Free Period to Day 365, 30 day LIBOR plus 7.00% - Rate Day 366 to 720, 30 Day LIBOR plus 7.25% - Rate Day 721 to 1095, 30 Day
LIBOR plus 12.00% Matured Rate Day 1096 and above. Each piece of equipment has it own calculations based on the date of
purchase. At September 30, 2020 and December 31, 2019, the amounts outstanding under this line of credit agreement were
$324,511 with $725,489 available and $408,033 with $91,967 available, respectively. Interest expense for the three and nine
months ended September 30, 2020 and 2019 was $837, $1,551 and $982, $6,232, respectively. The agreement has no expiration
date provided the Company does not default.
On
or about March 31, 2019, the Company entered into a line of credit with a finance company that provides for borrowing and refinancing
up to $6.5 million. The credit facility expires March 22,
2022. Interest is due monthly at a rate of 10%, per annum. Principal only becomes due and payable if the Company reaches the maximum
balance under the credit facility, which management does not expect to reach. If the maximum balance is reached, the principal
becomes payable at 1.25% of the outstanding principal balance per month. The line of credit is secured by substantially all of
the Company’s assets, other than those specifically secured by an existing agreement. At September 30, 2020 and December
31, 2019, the amounts outstanding under this line of credit agreement were $5,220,399 with $1,279,600 available for purchases
and $6,313,628 with $186,372 available, respectively. Interest expense for the three and nine months ended September 30, 2020
was $134,999 and $437,531, respectively. The interest expense for the same periods of 2019 was $106,545 and $262,157, respectively.
Note
7 – Related-Party Transactions
Related-Party
Note Payable
The
Company has a note payable to the Company’s President. The note is interest bearing at 10% per annum, unsecured and
payable upon demand. The balance of the note at September 30, 2020 and December 31, 2019 was $252,573 and $334,794,
respectively. During the nine months ended September 30, 2020 and 2019, the Company repaid $82,221 and $33,438 respectively,
on this note payable. The note incurred $9,955, $27,033 and $11,364, $34,093 in interest expense for the three and nine
months ended September 30, 2020 and 2019, respectively.
Lease
The
Company leases a building and real property in Chico, California under a one year lease agreement from a trust whose trustee is
the Company’s President. The lease provides for monthly lease payments of $9,800 per month, and expired on December 1, 2017.
AMERAMEX
INTERNATIONAL, INC.
NOTES
TO FINANCIAL STATEMENTS - UNAUDITED
September
30, 2020
The
Company was leasing the building and real property at the same rate on a month-to-month lease until March 1, 2020 when a one-year
agreement was signed renewable at anniversary for up to ten years. The new lease provides for monthly lease payments of $12,000.
Rent expense during the nine months ended September 30, 2020 and 2019, was $99,135 and $88,200, respectively.
Transactions
with Director
Two
separate customers lost financing for purchases of equipment after already receiving the machines, so the Company sold the machines
to the brokerage company of one of the Company’s Directors. The customers are now renting the machines on a rent to own
basis and the Company is purchasing the machines from the brokerage. The Company has two notes payable tied to these transactions
that at September 30, 2020 and December 31, 2019, have a combined total due of $179,457 and $221,566 respectively. The brokerage
made $42,681 on the transactions. The notes are secured by the equipment.
Note
8 – Notes Payable
Notes
payable as of September 30, 2020 and December 31, 2019 consisted of the following:
|
|
|
September
30, 2020
|
|
|
|
December
31, 2019
|
|
Payable to insurance
company; secured by cash surrender value of life insurance policy; no due date
|
|
$
|
158,535
|
|
|
$
|
158,535
|
|
|
|
|
|
|
|
|
|
|
Note
Payable to finance company dated March 20, 2019; interest at 0.0% per annum; monthly payments of $5,000; due at 15 months
from issuance; unsecured
|
|
|
—
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
|
|
Note Payable to finance company dated June 17,
2019; interest at 2.90% per annum; monthly payments of $4,749; due 48 months from issuance; secured by equipment
|
|
|
150,468
|
|
|
|
189,467
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated September 26, 2019; interest at 10.228% per annum; monthly payments of $4,383; due 60 months from issuance;
secured by equipment
|
|
|
166,459
|
|
|
|
197,033
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated September 13, 2019; interest at 2.90% per annum; monthly payments of $3,422; due at 48 months from issuance;
secured by equipment
|
|
|
114,722
|
|
|
|
142,689
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated September 18, 2019; interest at 10.52% per annum; monthly payments of $2,143; due at 35 months from
issuance; secured by equipment
|
|
|
44,457
|
|
|
|
59,566
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated November 1, 2019; interest at 0.0% per annum; monthly payments of $3,000; due 52 months from issuance;
final payment of $12,000; secured by equipment
|
|
|
135,000
|
|
|
|
162,000
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated November 22, 2019; interest at 0.0% per annum; monthly payments of $934; due 24 months from issuance;
secured by equipment
|
|
|
13,961
|
|
|
|
21,473
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated February 19, 2020; interest at 8.0% per annum; monthly payments of $16,500 for the first 6 months then
$11,520 for the remaining 36 months; due 42 months from issuance; secured by equipment
|
|
|
358,568
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated February 13, 2020; interest at 10.35% per annum; monthly payments of $28,903; due 12 months from issuance;
unsecured
|
|
|
127,008
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated March 20,2020; interest at 5.0% per annum; monthly payments of $6,135.98; due 60 months from issuance;
secured by equipment
|
|
|
301,044
|
|
|
|
—
|
|
AMERAMEX
INTERNATIONAL, INC.
NOTES
TO FINANCIAL STATEMENTS - UNAUDITED
September
30, 2020
Note Payable to
finance company dated March 20, 2020; interest at 5.0% per annum; monthly payments of $6,135.98; due 60 months from issuance;
secured by equipment
|
|
|
301,044
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note
Payable to finance company dated March 20, 2020; interest at 5.0% per annum; monthly payments of $6,135.98; due 60 months
from issuance; secured by equipment
|
|
|
301,044
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated March 20, 2020; interest at 5.0% per annum; monthly payments of $6,135.98; due 60 months from issuance;
secured by equipment
|
|
|
301,044
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated May 1, 2020; interest at 4.95% per annum; monthly payments of $5,709.31; due 60 months from issuance;
secured by equipment
|
|
|
284,958
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated May 22, 2020; interest at 10.582% per annum; monthly payments of $1,489.66; due 60 months from issuance;
secured by equipment
|
|
|
64,699
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
Small Business Administration, 1% interest per annum, due in installments from month seven (7) to April 21, 2022. Requested
forgiveness. 3.75% on portion not forgiven; monthly payments of $731.00; twelve (12) months deferred for a thirty
year term
|
|
|
388,442
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated June 22, 2020; interest at 10.582% per annum; monthly payments of $1,037.45; due 36 months from issuance;
secured by equipment
|
|
|
28,548
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated June 18, 2020; interest at 4.99% per annum; monthly payments of $1,207.47; due 60 months from issuance;
secured by equipment
|
|
|
61,164
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated June 22, 2020; interest at 10.582% per annum; monthly payments of $3,377.42; due 60 months from issuance;
secured by equipment
|
|
|
150,660
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated August 21, 2020; interest at 3.99% per annum; monthly payments of $4,456.50; due 60 months from issuance;
secured by equipment
|
|
|
41,864
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Note Payable to
finance company dated September 16, 2020; interest at 4.85% per annum; monthly payments of $4,778.59; due 36 months from issuance;
secured by equipment
|
|
|
159,800
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
3,653,489
|
|
|
|
945,763
|
|
|
|
|
|
|
|
|
|
|
Less current portion
|
|
|
1,059,971
|
|
|
|
386,528
|
|
|
|
|
|
|
|
|
|
|
Long-term portion
|
|
$
|
2,593,518
|
|
|
$
|
$559,235
|
|
Interest
expense for all notes payable for the three and nine months ended September 30, 2020 was $165,562 and $298,359, respectively.
The interest expense for the same periods of 2019 was $4,121 and $87,266, respectively.
AMERAMEX
INTERNATIONAL, INC.
NOTES
TO FINANCIAL STATEMENTS - UNAUDITED
September
30, 2020
Note
9 – Convertible Notes
On
or about July 20, 2020 and again on September 16, 2020, the Company and Geneva Roth Remark Holdings, Inc., a New York corporation
(“Buyer”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) by which the Buyer purchased
and the Company issued and sold convertible notes of the Company, in the aggregate principal amount of $120,000 (the “Notes”),
convertible into shares of common stock of the Company (the “Common Stock”).
A
summary of the terms of the Note are as follows:
The
principal amount of the Notes is $120,000, with an interest rate of 10% per annum, and a maturity date of July 20, 2021 and
September 16, 2021 net of direct loan costs of approximately $6,000.
Any
amount of principal or interest which is not paid by the maturity date shall bear interest at the rate of 22% per annum from
the due date thereof. The Note holds conversion rights, whereby the Buyer has the right from time to time, and at any time
after 180 days from July 20, 2020 and ending on the later of: (i) July 20, 2021 and (ii) the date of payment of the Default
Amount (payable only in the event of a default), to convert the outstanding amounts of the Note into fully paid and
non-assessable shares of Common Stock, at the Conversion Price (defined below). Principal may be repaid before the Maturity
Date at the following premiums:
Prepayment
Period
|
Prepayment
Percentage
|
1. The
period beginning on the Issue Date and ending on the date which is 60 days following the Issue Date.
|
120%
|
2. The
period beginning on the date which is 61 days following the Issue Date and ending on the date which is 90 days following the
Issue Date.
|
125%
|
3. The
period beginning on the date that is 91 days from the Issue Date and ending 150 days following the Issue Date.
|
130%
|
4. The
period beginning on the date that is 151 days from the Issue Date and ending 180 days following the Issue Date
|
135%
|
If
not paid at Maturity Date, the Conversion Price shall be equal to the Variable Conversion Price (as defined below) (subject to
equitable adjustments for stock splits, stock dividends or rights offerings by the Company relating to the Company’s securities
or the securities of any subsidiary of the Company, combinations, recapitalization, reclassifications, extraordinary distributions
and similar events). The "Variable Conversion Price" shall mean 65% multiplied by the Market Price (as defined below)
(representing a discount rate of 35%). “Market Price” means the lowest Trading Price (as defined below) for the Common
Stock during the ten Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading
Price” means, for any security as of any date, the closing bid price on the OTCQB, OTCQX, Pink Sheets electronic quotation
system or applicable trading market (the “OTC”) as reported by a reliable reporting service. 66,000,000 shares have
been reserved for possible conversion and principal and interest will increase to 150% in the event of default.
Management
intends to pay the Note at or prior to the Maturity Date and will accrete the discount, together with the expected prepayment
premium amount, over the expected term not to exceed 180 days. As of September 30, 2020, the accrued and accreted Interest Expense
for these convertible notes was $9,217 and $32,783, respectively.
Note
10 – Revenues
During
the three and nine months ended September 30, 2020 and 2019, revenues and costs related to domestic and foreign sales of equipment
are as follows:
|
|
Three
Months Ended September
|
|
Nine
Months Ended September
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Equipment Revenues
and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
$
|
5,880,412
|
|
|
$
|
3,302,228
|
|
|
$
|
9,101,566
|
|
|
$
|
10,702,161
|
|
Export
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
517,000
|
|
Total Revenues and
Other
|
|
$
|
5,880,412
|
|
|
$
|
3,302,228
|
|
|
$
|
9,101,566
|
|
|
$
|
11,219,161
|
|
AMERAMEX
INTERNATIONAL, INC.
NOTES
TO FINANCIAL STATEMENTS - UNAUDITED
September
30, 2020
Cost of Revenues
and Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
$
|
5,071,886
|
|
|
$
|
2,084,949
|
|
|
$
|
7,418,541
|
|
|
$
|
8,350,910
|
|
Export
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
403,298
|
|
Total Cost of Revenues
and Other
|
|
|
5,071,886
|
|
|
|
2,084,949
|
|
|
|
7,418,541
|
|
|
|
8,754,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
$
|
808,526
|
|
|
$
|
1,217,279
|
|
|
$
|
1,683,025
|
|
|
$
|
2,464,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During
the nine months ended September 30, 2020 and 2019, there were no foreign rentals of equipment.
Note
11 – Joint Venture
In
2019, the Company entered into a joint venture with one of its long-time collaborators whereby costs and profits are shared
equally. This arrangement was made in order to purchase
30 machines from a closing terminal in Seattle, Washington for $1,089,000. At September 30, 2020, the Company had repaid $17,500
(for equipment sold). During the same time period, the Company also remitted $61,651 in joint venture profits. The amount due
to the collaborator as of September 30, 2020 and December 31, 2019 was $442,000 and $459,500, respectively.
Note
12 – Commitments and Contingencies
From
time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There were two pending
legal proceedings which were subsequently dismissed as the Company reached a combined confidential settlement agreement. As of
September 30, 2020, this agreement is reflected on the balance sheet in the amount of $398,700. Should the Company default on
payment, a $200,000 penalty will be added to the remaining balance due.
See
Note 7 for related party operating lease.
Note
13 – Common Stock
On
September 14, 2020, the Company entered into an agreement with M Vest LLC, a FINRA registered
broker-dealer, contracting their services. In addition to monetary compensation, the Company paid out 2,000,000 fully vested
shares of the Company’s Common Stock. The shares of Common Stock will have unlimited piggyback registration rights and the
same rights afforded other holders of the Company’s Common Stock. We recorded compensation expense totaling $23,800 based
on the quoted market price of the Company’s Common Stock.
Note
14 – Subsequent Events
On
October 23, 2020, the Company submitted the Paycheck Protection Forgiveness Application to its financial institution According
to their response, the bank can take up to 60 days to review the documents for accuracy before then submitting to the SBA. The
SBA can then take up to 90 days to complete their review and determination of the request. Based on the form calculation table,
the Company is eligible for 100% forgiveness of the PPP loan that was funded on May 1, 2020 equal to $228,442.
On
or about October 16, 2020, the Company redeemed 26,799,998 shares of common stock from two former employees at zero cost to
the Company. These shares were returned to authorized, but unissued status. On or about October 22, 2020, the Company
redeemed 1,000,000 shares of common stock from a former employee at a minimal cost to the company. These shares were
returned to authorized, but unissued status.