UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the QuarterQuarterly Period ended March 31,June 30, 2019

Commission File Number: 000-56054

AMERAMEX INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

3930 Esplanade, Chico, CA 95973

(Address of principal executive offices)

(530) 895-8955

Registrant’s telephone number, including area code

_______________________________________________________________________________________________ 

Former address if changed since last report

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 ☒ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

☒ Yes  ☐ Yes     ☒ No

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

IF an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

There are 753,415,879 shares of common stock outstanding as of JulyAugust 9, 2019.

TABLE OF CONTENTS

PART I–FINANCIAL INFORMATION

ITEM 1. INTERIM FINANCIAL STATEMENTS

AMERAMEX INTERNATIONAL, INC.

BALANCE SHEETS

AS OF JUNE 30, 2019 AND DECEMBER 31, 2018

(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

AMERAMEX INTERNATIONAL, INC.

STATEMENTS OF OPERATIONS

FOR THE THREE AND COMPREHENSIVE LOSSSIX MONTHS ENDED JUNE 30, 2019 AND 2018

(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

AMERAMEX INTERNATIONAL, INC.

CONSOLIDATED STATEMENTSTATEMENTS OF STOCKHOLDERS’ DEFICITEQUITY

FOR THE THREESIX MONTHS ENDED MARCH 31,AS OF JUNE 30, 2019 AND 2018

(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

AMERAMEX INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS AS OF JUNE 30, 2019 AND 2018

(UNAUDITED)

The accompanying notes are an integral part of these condensed consolidated unaudited financial statements.

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

March 31,JUNE 30, 2019

(Unaudited)

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 March 31,June 30, 2019, the Company had working capital of approximately $2.7$3.3 million. We expect to generate sufficient cash flows from operations to meet our obligations, andweexpect to continue to obtain financing for equipment purchases in the normal course of business. In March 2019, we received a $6.5 million credit facility at commercially reasonable terms. We utilized this credit facility to pay off all outstanding debt. We believe that our expected cash flows from our long term rentals and operations andplus availability under our credit facilityfacilities will be sufficient to operate in the normal course of business for the next 12 months.

Basis of Presentation

The accompanyingunaudited interim financial statements and related notes have been prepared byin accordance with accounting principles generally accepted in the Company pursuant toUnited States of America (“U.S. GAAP”) for interim financial information, within the rules and regulations of the United States Securities and Exchange Commission (SEC)(the “SEC”). Certain information and Generally Accepted Accounting Principles.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-monththree and six-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, 2018 and notes thereto that are included in the Company’s Registration Statement on Form 10, as amended. 

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principlesUS 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 reserve, valuation allowance for deferred taxes, and estimated useful life of property and equipment.

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

March 31, 2019

(Unaudited)

Line of Credit Issuance Costs

We capitalize and amortize direct issue costs incurred in connection with our line of credit arrangement. On or about March 30, 2019 (see Note 13), we incurred $262,659 in costs comprised of originations fees totaling approximately $185,000, appraisal costs of approximately $65,000 and other costs totaling $12,659. These costs are amortized on a straight-line basis over the term of the debt.arrangements. Included in Other Assets in the accompanying balance sheet at March 31,June 30, 2019 (unaudited) are unamortized loan fees of $259,933.$172,431. During the six months ended June 30, 2019, the Company amortized $18,403 in loan fees.

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2019

(Unaudited) 

Concentrations

At March 31,For the six months ended June 30, 2019, 66.48%37% of the accounts receivable was due from three customers; at December 31, 2018, 53% of the accounts receivablesales was due from three customers who each accounted for 10% or more of sales and at December 31, 2017, 72%for the six months ended June 30, 2018, 31% of the accounts receivablesales was due from three customers. The losscustomers, one of one or more of these customers would have a negative impact on the Company’s financial results.

During the three months ended March 31, 2019, two customerswhich accounted for 30.22% of revenues; two customers accounted for more than 10% of revenues. During the three months ended March 31, 2018, three customers accounted for 50.14% of revenues; three customers accounted for more than 10% of revenues. For the year ended December 31, 2018 and 2017, no customers accounted for 10% or more12% of sales. The loss of one or more of these customers would have a negative impact on the Company’s financial results.

For the six months ended June 30, 2019, 69% of purchases was due to three vendors, one of which accounted for 51% of purchases. For the six months ended June 30, 2018, 57% of purchases was due to three vendors, two of which accounted for 21% each of purchases. The loss of one or more of these vendors would have a negative impact on the Company’s financial results.

Note 3 – Inventory

Inventory as of March 31,June 30, 2019 and December 31, 2018 consisted of the following:

All of the inventory is used as collateral for the linelines of credit and notes payable (see NoteNotes 6 7 and 13)7).

Note 4 – Property and Equipment

Property and equipment includes assets held for internal use; as of March 31,June 30, 2019 and December 31, 2018, and 2017, such consisted of the following:

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

March 31, 2019

(Unaudited)

Depreciation expense for the yearssix months ended December 31, 2018 and 2017 was $204,186 and $130,198 respectively. Depreciation expense for March 31,June 30, 2019 and 2018 was $35,643$89,918 and $35,513,$77,893, respectively.

All of the property and equipment is used as collateral for the linelines of credit and notes payable (see Notes 6 7 and 13)7).

Note 5 – Rental Equipment

Rental equipment as of March 31,June 30, 2019 and December 31, 2018 and 2017 consisted of the following:

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2019

(Unaudited) 

Depreciation expense for the threesix months ended March 31,June 30, 2019 and 2018 was $236,186$471,723 and $226,271, respectively. Depreciation expense for the years ended December 31, 2018 and 2017 was $979,252 and $672,941,$448,924, respectively.

All of the rental equipment is used as collateral for the linelines of credit and notes payable (see Notes 6 7 and 13)7).

Note 6 – Lines of Credit

The Company has a line of credit with a bankfinance company that provides for borrowing and refinancing up to $500,000. The line of$6.5 million, as amended. This credit is secured by real estate and bears interest at a variable rate calculated at 0.85% above the bank prime rate. At December 31, 2018 and 2017, the interest rate per annum and the amounts outstanding under this line of credit agreement were 6.1% and $457,951, and 5.1% and $488,000, respectively.facility expires March 22, 2022. The line of credit is secured by substantially all of the Company assets, other than those specifically secured by an existing agreement as well asdetailed in the building currently leased byfollowing paragraph and bears interest at a rate of 10%, per annum, calculated on a 30/360 basis. Principal only becomes due and payable if the Company – see Note 8 – Related Party Transactionsreaches the maximum balance under Lease. As discussedthe credit facility, for 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. Principal balance shall never exceed 75% of capital borrowed against in Note 13,order to satisfy covenants. At June 30, 2019, the amount outstanding under this line of credit was repaid in full during the three months ended March 31, 2019.$6,034,815 with $465,185 available for borrowing.

The Company has a line of credit with a finance company that provides for borrowing up to $500,000. The agreement may be terminated at any time with 45 days notice. 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, the interest calculates as follows; 30 day LIBOR plus 6.75% - rate after Free Period to Day 365,365; 30 day LIBOR plus 7.00% - Rate.

Rate Day 366 to 720,720; 30 Day LIBOR plus 7.25% - Rate Day 721 to 1095,1095; 30 Day LIBOR plus12.00%plus 12.00% - Matured Rate Day 1096 and above. At March 31,June 30, 2019, December 31 2018 and 2017, the amountsamount outstanding under this line of credit agreement were $483,402, $316,505 and zero, respectively. This note was not refinanced in connection$296,761 with the note described in Note 13 and remains$203,239 available for the Company’s operations.

AMERAMEX INTERNATIONAL, INC.borrowing.

NOTES TO FINANCIAL STATEMENTS

March 31, 2019

(Unaudited)

Note 7 – Notes Payable

Notes payable as of March 31,June 30, 2019 and December 31, 2018 and 2017 consisted of the following:

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

March 31,JUNE 30, 2019

(Unaudited)

Note Payable 025 to finance company dated October 26, 2017; interest at 7.8% per annum; monthly principal and interest payments of $2,019; due 72 months from issuance; secured by equipment; fully paid by March 31, 2019

—

98,580

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

March 31,JUNE 30, 2019

(Unaudited)

Note 8 – 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 March 31,June 30, 2019 and December 31, 2018 was $348,984$352,542 and $353,643, respectively. During the yearsix months ended December 31, 2018,June 30, 2019, the Company purchased a 2016 GMC K3500 truck for $50,000 from its President to be used by the Company’s sales department, amount of which was added to the principal of this note payable. During the six months ended June 30, 2019, $11,513 was repaid $49,008 on this note payable. TheAs of June 30, 2018, $12,233 was repaid on this note incurred $29,774 in interest expense for the year ended December 31, 2018.payable.

Lease

The Company leases a building and real property in Chico, California under a five yearfive-year lease agreement from a trust whose trustee is the Company’s President. The lease providesprovided for monthly lease paymentpayments of $9,800 per month, and expired on December 1, 2017. The Company is currently leasing the building and real property at the same rate on a month-to-month lease. Rent expense for the years ended December 31, 2018 was $107,800. Rent expense during the threesix months ended March 31,June 30, 2019 and 2018, was $29,400$58,800 and $19,600$49,000, respectively.

Note 9 – Stockholders’ Equity

The Company has authorized 5,000,000 shares of $0.001 par value blank check preferred stock, of which no shares were issued and outstanding as of March 31,June 30, 2019.

The Company has authorized 1,000,000,000 shares of $0.001 par value common stock, of which 753,415,879 were issued and outstanding as of March 31,June 30, 2019.

During the threesix months ended March 31,June 30, 2019, and the three years ended December 31, 2018 and 2017, the Company issued nodid not issue any stock.

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2019

(Unaudited) 

Note 10 – Revenues

During the threesix months ended March 31,June 30, 2019 and 2018, and the years ended December 31, 2018 and 2017, revenues and costs related to domestic and foreign sales of equipment are as follows:

During the threesix months ended March 31,June 30, 2019 and 2018, there were no foreign rentals of equipment.

Note 11 – Commitments and Contingencies

From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. There are no pending significant legal proceedings to which the Company is a party for which management believes the ultimate outcome would have a material adverse effect on the Company’sCompany's financial position. There are no pending legal proceedings that are expected to be material to our cash flow and operating results.

See Note 8 for related party operating lease.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

Overview of the Business

We sell, lease, and rent heavy equipment to companies within four industries: construction (light and infrastructure), shipping logistics, mining, and commercial farming. With customers in the United States, Canada, Latin America, Asia and Africa, we have over 30 years of experience in heavy equipment sales and service and inventories of top-of-the-line equipment from manufacturers such as Taylor Machine Works Inc. and Terex Heavy Equipment. We were originally incorporated as Hamre Equipment Company, Inc. in California on November 17, 1989. We merged into AmeraMex International, Inc., a Nevada corporation, on May 29, 1990.