American Mold Guard CL B Wrt (MM) (NASDAQ:AMGIZ)
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American Mold Guard, Inc. (Nasdaq SC: AMGI, AMGIW,
AMGIZ), an industry leader in the field of mold prevention services,
today announced financial results for its first quarter ended March
31, 2006.
First Quarter Results
The company reported first quarter 2006 net sales of $2.76
million, an increase of 177 percent from $1.0 million for the first
quarter of 2005. Net sales increased primarily due to higher demand
for the company's services and a price increase enacted in the
beginning of the year. Gross margin for the first quarter of 2006 was
$ 1.16 million, an increase of 330 percent from the $270,699 gross
margin for the first quarter of 2005. The gross margin increase was
realized through improved crew productivity and from a price increase
that the company implemented.
The company reported a net loss from operations for the first
quarter of 2006 of $1.13 million, or $1.20 per share, compared to a
net loss of $.96 million, or $1.05 per share, for the first quarter of
2005. Included in the first quarter 2006 net loss is interest expense
of $.73 million and $33,407 of charges related to equity-based
compensation as a result of implementation of SFAS 123R. The first
quarter 2006 net loss increase from the prior year was primarily due
to additional debt and the associated interest expense that the
company assumed. The per share net loss information reflects the
effect of the one-for-.340124209 reverse stock split, effective April
7, 2006.
"Our net sales and gross margin performance in the first quarter
of 2006 exceeded our expectations and, together with the closing of
our initial public offering in May 2006, has provided us with an
exciting start for 2006," said Tom Blakeley, chief executive officer.
"We are expanding our service centers and we have plans to enter new
regions as we continue to see increased customer interest in our Mold
Prevention services," concluded Blakeley.
Second Quarter 2006 Outlook
For the second quarter of 2006, the company is estimating revenue
in the range of $2.7 to 2.8 million.
Completion of the Company's Initial Public Offering
On May 2, 2006, the company closed its initial public offering of
1,350,000 units, each unit consisting of two shares of common stock,
two Class A warrants and two Class B warrants, at $13.00 per unit. The
offering raised net proceeds of $16.0 million, after underwriter
discounts and direct expenses. On May 23, 2006, the representative of
the several underwriters exercised their over-allotment option and
purchased an additional 100,000 units. The exercise of the
over-allotment option raised additional net proceeds of $1.2 million,
after underwriting discounts. On May 31, 2006, the company announced
that representative of the several underwriters exercised the balance
of their over-allotment option. At the closing, scheduled for June 5,
2006, the company will issue 205,000 shares of common stock, 205,000
Class A warrants and 205,000 Class B warrants to the underwriters. The
gross proceeds from this exercise of the over-allotment option will be
approximately $1.33 million and the net proceeds to the company, after
the underwriting discount, will be approximately $1.24 million. The
total gross proceeds from the company's initial public offering will
be approximately $20.2 million and the company expects to realize
aggregate net proceeds of approximately $18.42 million. As noted in
the company's offering prospectus, significant amounts of the net
proceeds of the offering will be used to repay outstanding debt of the
company and for working capital purposes.
Conference Call and Webcast
American Mold Guard will discuss its first quarter 2006 results,
along with its revenue outlook for the second quarter of 2006, on a
conference call today beginning at 1:30 p.m. Pacific Daylight Time.
You can listen to the call by Domestic Dial at 800-865-4445 or you can
access via a live webcast at
http://www.vcall.com/IC/CEPage.asp?ID=105035. Prior to the call the
company intends to post on its website a copy of the company's current
report on Form 8-K dated June 1, 2006 including its operating results
for the quarter ended March 31, 2006. The company's web site can be
accessed at www.americanmoldguard.com under "Company / Press
Releases".
About American Mold Guard
American Mold Guard, Inc., founded in 2002, is an industry leader
in the field of mold prevention services. Its services are primarily
focused on the residential real estate construction industry in
California, Texas, Florida and Louisiana. Its customers include many
of the largest national and regional home builders. Visit:
www.americanmoldguard.com
Forward-Looking Statements
Except for historical information contained in this release,
statements in this release may constitute forward-looking statements
regarding the company's performance, growth opportunities, customer
interest, expansion plans, assumptions, projections, expectations,
targets, intentions or beliefs about future events. Words or phrases
such as "anticipates," "believes," "estimates," "expects," "intends,"
"plans," "predicts," "projects," "targets," "will likely result,"
"will continue," "may," "could" or similar expressions identify
forward-looking statements. Forward-looking statements involve risks
and uncertainties, which could cause actual results or outcomes to
differ materially from those expressed. We caution that while we make
such statements in good faith and we believe such statements are based
on reasonable assumptions, including, without limitation, management's
examination of historical operating trends, data contained in records,
and other data available from third parties, we cannot assure you that
the company's projections will be achieved. In addition to other
factors and matters discussed from time to time in the company's
filings with the U.S. Securities and Exchange Commission, some
important factors that could cause actual results or outcomes for the
company to differ materially from those discussed in forward-looking
statements include: our history of losses and cash flow deficits;
future broad market acceptance of mold prevention services; our
limited operating history; our likely need to raise additional capital
in the future; the possibility that we may not be able to raise
additional capital in the future; the possibility that we cannot
successfully establish the "Mold Guard" brand; the absence of
significant proprietary technology underlying our services; the likely
development of increased competition; our high dependence on a limited
number of customers; the possibility that we will not keep up with
changes in our industry; our reliance on suppliers to provide us with
raw materials; the absence of exclusive or long-term commitments from
our customers; the limited amount of our general liability insurance
coverage; the lack of diversification of our business; our reliance on
key personnel; our high administrative expenses relative to our
size;and the possibility that we cannot manage our growth effectively;
the anticipated benefits and risks associated with the company's
business strategy; the company's future operating results and the
future value of its common stock; the anticipated size or trends of
the markets in which the company competes and the anticipated
competition in those markets; the company's ability to attract
customers in a cost-efficient manner; the company's ability to attract
and retain qualified management personnel; potential governmental
regulations; the possibility of future acquisitions of businesses or
assets; possible expansion into international markets; and changes in
general economic conditions in the markets in which the company may
compete. Any forward-looking statement speaks only as of the date on
which such statement is made, and, except as required by law, the
company undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which
such statement is made or to reflect the occurrence of unanticipated
events. New factors emerge from time to time, and it is not possible
for management to predict all such factors.
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AMERICAN MOLD GUARD, INC.
CONDENSED CONSOLIDATED (UNAUDITED) STATEMENTS OF OPERATIONS
----------------------------------------------------------------------
Three Months Ended
March 31, March 31,
2005 2006
----------------------------------------------------------------------
Revenue, Net $ 995,699 $ 2,761,654
Cost of Revenue
Direct Costs 704,728 1,563,955
Depreciation Expense 20,272 33,558
-------------------------
Total Cost of revenue 725,000 1,597,513
Gross Margin 270,699 1,164,141
=========================
Selling, general and Administrative expenses 1,067,197 1,564,305
-------------------------
Loss from operations (796,498) (400,164)
Interest Expense (163,839) (728,697)
-------------------------
Loss before provision for taxes (960,337) (1,128,861)
Provision for taxes 800 3,868
-------------------------
Net Loss ($961,137) ($1,132,729)
=========================
Dividends on cumulative preferred stock 152,397 292,443
-------------------------
Net Loss applicable to common shareholders (1,113,534) (1,425,172)
=========================
Basic and diluted net loss per share $ (1.05) $ (1.20)
=========================
Dividends accumulated for the year on
cumulative preferred stock $ (0.17) $ (0.31)
=========================
Net Loss attributable to common stock per
share $ (1.22) $ (1.51)
=========================
Weighted average number of common shares
outstanding basic and diluted
911,554 942,301
=========================
AMERICAN MOLD GUARD, INC.
CONDENSED CONSOLIDATED (UNAUDITED) BALANCE SHEET
----------------------------------------------------------------------
December 31, March 31,
2005 2006
----------------------------------------------------------------------
ASSETS
Current Assets:
Cash & cash equivalents $ 67,782 $ 330,847
Accounts receivable, less allowance
for doubtful accounts 1,257,356 1,666,426
Inventories 38,039 53,237
Deferred Offering Costs 620,882 932,957
Deposits 115,935 190,275
Other Current Assets 80,122 32,412
------------ ------------
Total Current Assets 2,180,116 3,206,154
Property & Equipment 309,465 325,258
Intangible Assets 2,536 2,029
------------ ------------
TOTAL ASSETS $ 2,492,117 $ 3,533,441
============ ============
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current Liabilities
Accounts payable and accrued
liabilities $ 1,908,414 $ 2,371,329
Accrued payroll-related expenses 1,687,834 1,941,911
Short term notes payable 3,129,986 3,833,364
Accrued interest payable 372,326 538,403
------------ ------------
Total Current Liabilities $ 7,098,560 $ 8,685,007
------------ ------------
Long-term liabilities
Long-term notes payable,
net of discount 835,089 1,219,957
------------ ------------
Total Liabilities 7,933,649 9,904,964
------------ ------------
Shareholders' Deficiency
Series A Preferred Stock 625,000 625,000
Series B Preferred Stock 859,000 859,000
Common Stock 1,475,262 1,475,265
Additional paid-in capital 2,005,289 2,208,024
Accumulated deficiency (10,406,083) (11,538,812)
------------ ------------
Total Shareholders' Deficiency (5,441,532) (6,371,523)
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
DEFICIENCY
$ 2,492,117 $ 3,533,441
============ ============
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