Ameramex International Inc - Annual Report: 2021 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2021

Or

For the transition period from _______________ to __________________

Commission file number: 000-56054

Registrant’s telephone number, including area code: 530-895-8955 

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.001 par value per share

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  

☐ Yes   ☑   No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. ☐ Yes   ☑   No

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 periods 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 and posted on its corporate website, 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 periods that the registrant was required to submit and post such files). ☑  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,” “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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☐

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

On June 29, 2021, the last business day of the Registrant’s most recently completed second fiscal quarter, the aggregate market value of the Common Stock held by non-affiliates of the Registrant was $2,120,261 based upon the closing price on that date of the Common Stock of the Registrant on the OTCQB marketplace of $0.41.

The Registrant had 14,629,155 shares of Common Stock outstanding as of March 31, 2022.

DOCUMENTS INCORPORATED BY REFERENCE: None. 

  PART I

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Annual Report”) contains 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 (the “Exchange Act”). These forward-looking statements are not historical facts, but rather are based on our current expectations, estimates, and projections about us and our industry. You can identify these forward-looking statements when you see us using words such as “expect,” “anticipate,” “estimate,” “plan,” “believe,” “seek,” and other similar expressions that are intended to identify forward-looking statements. They include, but not limited to. statements regarding our:

This Annual Report on Form 10-K (this “Annual Report”) contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are not historical facts, but rather are based on our current expectations, estimates, and projections about us and our industry. You can identify these forward-looking statements when you see us using words such as “expect,” “anticipate,” “estimate,” “plan,” “believe,” “seek,” and other similar expressions that are intended to identify forward-looking statements. They include statements regarding our:

Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and are subject to certain risks, uncertainties, and other factors, some of which are beyond our control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted. All statements other than statements of historical facts included in this Annual Report including, without limitation, any projections and assumptions in this Annual Report, are forward-looking statements. Although we believe the expectations and forecasts reflected in these and other forward-looking statements are reasonable, we can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Factors that could cause actual results to differ materially from expected results include, but are not limited to:

You should not place undue reliance on these forward-looking statements, which reflect our management’s view only on the date of this Annual Report. We undertake no obligation to update these statements or to report the result of any revision to the forward-looking statements that we may make to reflect events or circumstances after the date of this Annual Report or to reflect the occurrence of unanticipated events. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements.

Recent Developments Related to the COVID-19 Outbreak

All of the disclosures set forth in Item 1 below should be read in the context of the recent COVID-19 related developments discussed immediately below.  All of the disclosures recited in “Recent Developments Related to the COVID-19 Outbreak” are as of the date of this filing.

The occurrence of the COVID-19 pandemic has and may continue to negatively affect our operations depending on the severity and longevity of the pandemic.

The COVID-19 pandemic is currently impacting countries, communities, supply chains, and businesses as well as the global financial markets. The COVID-19 pandemic has resulted in in social distancing, travel bans, and quarantine measures, which have limited access to our facilities, customers, management, support staff, and professional advisors. These factors, in turn, have impacted and may continue to impact our operations, financial condition, and demand for our goods and services as well as our overall ability to react timely to mitigate the impact of this event. Also, the COVID-19 pandemic has hampered and may continue to hamper our efforts to comply with our filing obligations with the SEC. Depending on the severity and longevity of the COVID-19 pandemic, our business, customers, and shareholders may continue to experience a significant negative impact.

With the vaccination of multiple employees and as the State of California reduces restrictions, our sales, administrative, and accounting employees have returned to our main office. We are continuing our extended cleaning efforts and restrictions on the number of customers allowed inside the facility at a time. Shop employees are servicing contracts with our essential customers and are often traveling to do so. All employees are practicing social distancing.

In connection with the COVID-19 pandemic, we received the following financial assistance from the Small Business Administration (SBA):

General

The following is a summary of some of the information contained in this document. Unless the context requires otherwise, references in this document to “our Company,” “us,” “we,” “our,” “AmeraMex,” or the “Company” are to AmeraMex International, Inc.

Organization

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 November 2, 2006.

Objectives

Continue to develop and expand the availability of our products to the heavy equipment industry;

Expand online, direct, wholesale, and government sales (both domestic and international); and

Expand our construction equipment division.

Description of Business and Principal Products or Services

We sell, lease, and rent heavy equipment to companies within five industries:

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., ASV and Terex Heavy Equipment.

Our parts warehouse contains a sizeable heavy equipment parts inventory, ensuring that we have the necessary parts on hand to maintain and repair all lines of represented equipment. Our in-house and field technicians solve service needs to get equipment back on the job as quickly as possible.

Our service facility is equipped with overhead cranes, a paint shop, and a welding-fabricating shop. The facility includes modern, specialized tools and state-of-the-art diagnostic equipment. Our service staff has access to manufacturers’ technical specifications to speed repairs.

Distribution Network

We sell, lease, and rent heavy equipment to a wide variety of industries, including construction, mining, infrastructure, logging, logistics, transportation, and commercial farming. We are authorized dealers for manufacturers such as Taylor Machine Works, Terex Heavy Equipment, Barko Hydraulics, Genie, and Menzi Muck.

We acquire used equipment for resale through trade-ins from our customers, returned customer leases, and selective purchases. We also sell parts and provide repair and maintenance services directly to customers at our Northern California location.

Hamre Heavy Haul, one of our divisions, operates a fleet of heavy haul equipment which includes a fleet of Kenworth trucks and Cozad heavy haulers to transport heavy equipment for our purchase and lease customers as well as others throughout the United States.

Our end-user base is diverse and fragmented, including, among others, light and heavy manufacturers, trucking and automotive companies, rental companies, building materials and paper suppliers, lumber, metal products, warehouses, retailers, food distributors, container handling companies, and domestic and foreign government agencies.

We obtain new customers in several different ways:

Governmental Regulation

We are subject to numerous federal, state, and local rules and regulations, including regulations promulgated by the Environmental Protection Agency (EPA) and similar state agencies with respect to storing, shipping, disposing, discharging, and manufacturing hazardous materials and hazardous and non-hazardous waste. These activities are associated with the repair and maintenance of our equipment and customers’ equipment. Compliance with these rules and regulations has not had any material effect on our operations, nor do we expect it to in the future. Further, we have not made, and do not anticipate making, any material capital expenditures in compliance with environmental regulations. However, there can be no assurance that these expectations will prove to be accurate, particularly if regulations change, unforeseen incidents occur or unknown past contamination or non-compliance is discovered, among other similar events.

Jumpstart Our Business Startups Act

We qualify as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we did not have more than $1,070,000,000 in annual gross revenue and did not have such amount as of December 31, 2020, our last fiscal year.

We may lose our status as an emerging growth company on the last day of our fiscal year during which (i) our annual gross revenue exceeds $1,070,000,000 or (ii) we issue more than $1,070,000,000 in non-convertible debt in a three-year period. We will lose our status as an emerging growth company if at any time we are deemed to be a large accelerated filer. We will lose our status as an emerging growth company on the last day of our fiscal year following the fifth anniversary of the date of the first sale of common equity securities pursuant to an effective registration statement.

As an emerging growth company, we may take advantage of specified reduced reporting and other burdens that are otherwise applicable to generally reporting companies. These provisions include:

History

We have grown from a used forklift dealer in Northern California to the owner and operator of a multi-million dollar fleet of heavy equipment for sale, lease, or rent to companies in the United States, Canada, Latin America, Asia, and Africa.

We have three business units:

1. Hamre Equipment;

2. Hamre Heavy Haul; and

3. Hamre Parts & Service.

These units are authorized dealers for well-known equipment manufacturers and carry a large inventory of heavy equipment and Hamre Parts & Service includes a complete maintenance organization with a large parts inventory and service department.

We supply heavy equipment to many different industries. Currently, the majority of our revenue is from the sales of new and refurbished container handlers to portside logistics companies. In addition to this line of work, we have an extensive equipment inventory for infrastructure development. Growing demand for infrastructure development typically calls for equipment to be rented, rather than purchased, allowing us to maximize the use of our inventory.

The Hamre Heavy Haul business unit includes a customized fleet of heavy haul equipment and was initially formed to transfer heavy equipment for us, however, in recent years, we have expanded this unit to market our heavy haul services to third-party companies throughout the United States.

Strategy

We have a clearly defined strategy to find opportunities that expand our reach within the United States and internationally. We now have customers in over 12 countries. As we continue to sell new equipment to U.S. customers, we purchase older equipment from well-respected brands that may not meet EPA Tier III requirements in the U.S., and refurbish the equipment to like-new condition. The equipment is sold AS IS with NO warranty agreement. The equipment is then marketed internationally. Our target markets for sales of new and refurbished equipment are:

Opportunities

We believe the demand for leased or rented equipment is growing. Companies within the construction and logistics industries hesitate to purchase equipment that may become idle if related markets weaken. Additionally, the cost of many types of heavy-duty equipment and container handlers has increased substantially because of new federal emission control standards. Due to these and other concerns, many companies forgo purchasing and instead rent or lease needed equipment.

Internationally, our ongoing expansion, specifically within Western Africa, allows us to take advantage of the improving global infrastructure construction market and the increased import and export of natural resources. We have already established marketing opportunities within the governments of several West African countries. 

The current trade issues with China have no bearing on our business or current plans. However, trade issues between the United States and China are constantly evolving and the future could bring about potential negative impacts on our business, including increased costs and higher prices.

Market

Our market is highly competitive and constantly changing. Commercial success is frequently dependent upon capital availability, the effectiveness and sufficiency of which are very difficult to accurately predict. It is one of the principal economic risks of companies in our industry.

According to the “Heavy Construction Equipment Market Will Reach $90.4 Billion by 2025,” published by Grand View Research in January 2019/2020 (the “Construction Equipment Report”): The global heavy construction equipment market size is expected to reach $90.4 billion by 2025 at a CAGR of 5.4%. Increased investment of infrastructure will be a major factor in driving market growth.

Competition

There are a large number of companies and individuals engaged in the provision of construction equipment; accordingly, there is a high degree of competition in our industry. Many of the companies and individuals with whom we compete have substantially greater technical, personnel, and financial resources than us. In view of our limited financial resources, we will continue to be at a significant competitive disadvantage compared to our competitors.

According to the Construction Equipment Report, global vendors such as Caterpillar, Komatsu Ltd., and AB Volvo are some of the leading market players in the heavy equipment industry. These vendors dominate the market in terms of technology, experience, and quality.

A rise in prominence of Chinese vendors in the industry has been observed in the last few years. Manufacturers in China have capitalized on government-funded infrastructure projects and are continuously evolving and in some circumstances, acquiring European vendors.

Some other key players in the market for heavy duty construction equipment are Hitachi Construction Machinery Co. Ltd., Liebherr, Deere & Company, Doosan Bobcat, XCMG Group, SANY Group, and Zoomlion Heavy Industry Science & Technology Co. Ltd.

FINRA Corporate Action/Information Statement on Form 14C

On December 21, 2020, we effected a one for fifty (1:50) reverse stock split (the “Reverse Stock Split”). To effect the Reverse Stock Split, we filed a Certificate of Amendment to our Restated Certificate of Incorporation with the Nevada Secretary of State. The Reverse Stock Split was approved by our Board of Directors on September 9, 2020 and by our stockholders on September 11, 2020, by a written consent in lieu of a special meeting of stockholders.

As a result of the Reverse Stock Split, every 50 shares of issued and outstanding Common Stock were automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Split and any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share. Following the Reverse Stock Split, the number of shares of Common Stock outstanding was reduced from 753,415,879 shares to 15,068,317 shares. There was no change to the number of authorized shares.

Unless otherwise indicated, all share and per share amounts included in this Annual Report reflect the effects of the Reverse Stock Split. 

Additional Information  

We file annual, quarterly, and other reports, proxy statements and other information with the SEC. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding us and other issuers that file electronically with the SEC.  

Our corporate website address is www.ammx.net. We make available free of charge, through the Investor Relations section of our website, annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The information which appears on our corporate website is not part of this Annual Report.

ITEM 1A. RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 2. PROPERTIES

We lease a building and real property in Chico, California from a trust whose trustee is Lee Hamre, our President for monthly lease payments of $12,000. We are currently leasing the building and real property through a lease that renews annually. The total rent for 2021 was $144,000, and the total rent for 2020 was $139,600.

ITEM 3. LEGAL PROCEEDINGS  

We anticipate that we will from time to time become subject to claims and legal proceedings arising in the ordinary course of business. It is not feasible to predict the outcome of any such proceedings and we cannot give any assurance that their ultimate disposition will not have a materially adverse effect on our business, financial condition, cash flows or results of operations. As of the date of this Annual Report, we have no legal proceedings pending.  

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable. 

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES  

Market Information

Our stock is traded on the OTCQB Venture Market (“OTCQB”) operated by the OTC Markets Group, Inc. Our trading symbol is AMMX. Only a limited market exists for our securities. There is no assurance that a regular trading market will develop, or if developed, that it will be sustained. Therefore, a shareholder may be unable to resell their securities in our Company.   

The following table sets forth the range of high and low bid quotations for our Common Stock for each of the periods indicated as reported by the OTCQB within the two most recent fiscal years. These quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

Holders of our Common Stock  

We have approximately 257 record holders of our Common Stock as of the date of this Annual Report according to the records of our transfer agent. The number of our stockholders of record excludes any estimate by us of the number of beneficial owners of shares held in street name, the accuracy of which cannot be guaranteed.  

Our transfer agent is Pacific Stock Transfer Company, 6725 Via Austi Parkway, #300, Las Vegas, Nevada, 89119. Their telephone number is (800) 785-7782.

Dividends

We have not declared a dividend on our Common Stock, and we do not anticipate the payment of dividends in the near future as we intend to reinvest our profits to grow our business.

There are no restrictions in our articles of incorporation or bylaws that restrict us from declaring dividends. The Nevada Revised Statutes, however, does prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:

Employees Stock Compensation Plan

We do not have a Stock Option Plan as of the date of this filing.

Recent Sales of Unregistered Securities

During 2019, we did not issue any shares of common or preferred stock.

On April 28, 2021, the Company paid out 80,000 fully vested shares of the Company’s Common Stock as final payment per the contract between the Company and M Vest LLC, an SEC registered, FINRA member broker-dealer for services. The shares of Common Stock have and the same rights afforded other holders of the Company’s Common Stock.

All issuances have been exempt from the registration requirements of Section 5 of the Securities Act of 1933 as they did not involve a public offering under Section 4(a)(2) and were issued as restricted securities as defined in Rule 144 of the Act.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.  

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION  

The following discussion and analysis should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Annual Report.

Forward Looking Statements  

Certain statements contained in this Annual Report, including statements regarding the anticipated development and expansion of our business, our intent, belief, or current expectations, primarily with respect to our future operating performance and the products and services we expect to offer and other statements contained herein regarding matters that are not historical facts, are “forward-looking” statements. Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also forward-looking statements which involve risks, uncertainties, and assumptions. Because forward-looking statements are inherently subject to risks and uncertainties, our actual results may differ materially from the results discussed in the forward-looking statements. The following discussion and analysis of financial condition and results of our operations is based upon, and should be read in conjunction with, the audited financial statements and related notes elsewhere in this Annual Report.

Overview  

We sell, lease, and rent heavy equipment to companies within four industries: construction (light and infrastructure), shipping logistics, mining, forestry, 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 maintain inventories of top-of-the-line equipment from manufacturers such as Taylor Machine Works Inc., ASV, 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 November 2, 2006. 

Selected Financial Data 

Statements of Income for the Years Ended December 31, 2021 and 2020. 

Results of Operations for the Fiscal Year Ended December 31, 2021 as compared to the Fiscal Year Ended December 31, 2020

We had revenues of $24,721,838 for the year ended December 31, 2021 as compared to revenue of $12,279,120 for the year ended December 31, 2020, a 101% increase. This increase is attributed to the conversion of six machines from long-term rent to sales, a multi-machine purchase by one of our long-term customers, the momentum our industry has experience since the re-opening of the State of California after the pandemic and the reduced interest rates our customers have secured while obtaining financing.

We had costs of revenue of $19,694,075 for the year ended December 31, 2021 as compared to costs of $10,509,656 for the year ended December 31, 2020. Our costs increased by $9,184,419, or 87%. This increase is as a result of purchasing significantly more machines to meet the demand.

We experienced an increase in operating expenses of $1,863,797 in 2021 as compared to $1,828,073 in 2020. This is an increase of approximately 2% in operating expenses. However, if we remove the legal settlement that caused the higher operating costs in 2020, the increase year over year is 33%. The majority of this increase is made up from selling expenses which were almost double when comparing the two years. This is consistent with the increase in Total Sales numbers.

We had net profit of $1,631,747 for the year ended December 31, 2021 as compared to net loss of $582,690 for the year ended December 31, 2010. We had an increase of $2,214,437 in our net income due to the record-breaking sales made in 2021 fiscal year.

Sales of Equipment and Other Revenues in 2021 were $22,253,695 and made up 90% of our Total Revenues and in 2020 made up $9,665,607, or 79%, of Total Revenues. The remaining portion of Total Revenues, Rentals and Leases, was $2,468,143, or 10%, in 2021 and in 2020, Rentals and Leases made up 21% of Total Revenues and totaled $2,631,172.

Gross profit on Sales of Equipment and Other Revenues in 2021 increased from $98,905 in 2020 to $3,375,450 in 2021. During the first six months of 2020, we had significantly lower labor and hauling revenue due to the Pandemic. While business improved during the last six months of 2020, we couldn’t make up the deficit of the first six months. However, we had record-breaking sales all throughout 2021 as Pandemic-related restrictions eased and lifted, and the country better adapted to the effects of COVID-19.

From 2020 to 2021, Sales of Equipment and Other Revenues increased $12,588,088, or 130% while during the same period Rentals and Leases decreased $145,370, or 6%. In 2021, while we did obtain new rental contracts throughout the year, six rental contracts were converted to sales which accounts for the decrease year over year in Rental Revenue. At the same time, Equipment Sales were at record highs compared to the record lows of 2020 due to the Global Pandemic.

We experienced an increase in operating expenses from $1,863,797 in 2021 as compared to $1,828,073 in 2020. This increase of approximately 2% in operating expenses is a result of the combined record sales for 2021 and of the Global Pandemic and a one-time legal settlement liability of 2020.

From 2020 to 2021, our Interest Expense decreased from $1,047,330 to $943,442. This decrease is due in part to the reduction in debt incurred and reduced interest rates tied to financing.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources. 

Liquidity and Capital Resources

Selected Financial Data:

Summary of Cash Flows Fiscal 2021 and Fiscal 2020:

As of December 31, 2020, our Net Cash (provided by) used in Operating Activities was $(256,068). This number increased to $5,783,721 as of December 31, 2021. Comparing December 31, 2020 to December 31, 2021, our Accounts Receivable increased from $178,661 to $393,929. Our Inventory was increased by $(1,031,615) as of December 31, 2020 and as of December 31, 2021, Inventory had increased by $2,850,567. Accounts Payable as of December 31, 2020 was $88,394, but by December 31, 2021, our Accounts Payable was reduced by $60,124.

As of December 31, 2020, our Payments for Property and Equipment was $141,998 and as of December 31, 2021 was $513,798. Payments for Rental Equipment as of the end of 2020 was $611,830 and as of the end of 2021 was $724,070. Overall, Net Cash Used in Investing Activities as of the end of 2020 was $753,828 and $1,237,868 by the end of 2021.

We received Proceeds from Notes Payable as of December 31, 2020 of $4,594,871 and as of December 31, 2021, the amount was $2,503,698, a decrease of $2,091,173, which is a decrease of 46%. Payments on Notes Payable increased as of the end of 2021 to $3,369,531 from $2,191,602 at the end of 2020. This is an increase of $1,177,929, or 54%. There was a Joint Venture Liability (as further described in Note 9 to the Financial Statements) in 2021 for $297,000, this is a 1385% increase from $20,000 for 2020. In addition, the Net Borrowings under Lines of Credit as of the end of 2021 was $2,568,833 compared to $971,861 at the end of 2020, an increase of $1,596,972, which is 164%. Overall Net Cash Provided by (Used In) Financing Activities went from $1,303,273 as of the end of 2020 to $(3,958,325) as of the end of 2021.

We expect to generate sufficient cash flows from operations to meet our obligations, and to continue to obtain financing for equipment purchases in the normal course of business.

Management may sell and lease equipment and obtain additional debt financing to acquire equipment and provide cash flow for operations.

Critical Accounting Policies

All companies are required to include a discussion of critical accounting policies and estimates used in the preparation of their financial statements. On an on-going basis, we evaluate our critical accounting policies and estimates. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our inventory consists of used equipment held for sale and includes parts and attachments. Our inventory is valued at the lower of the inventory’s cost (specific identification or first in, first out basis) or the current market price of the inventory, less costs to sell. Our expenditures for transporting equipment to our facility and refurbishment costs, including parts and labor, are added to the value of the inventory and these costs are capitalized. Our management compares the cost of inventory with its market value and allowances are made to write down inventory to market value if market value is lower.

Expenditures for maintenance and repairs for property and equipment and rental equipment are expensed as incurred. Any additional renewals and improvements to property and equipment and rental equipment, and which extend its useful life, are capitalized. When these assets are retired or otherwise disposed of, the related costs for the assets and the accumulated depreciation are removed from the respective accounts. Any gain or loss is included in our operations. We depreciate these assets using the straight-line method for substantially all assets with estimated lives as follows:

For the impairment or disposal of our long-lived assets (assets expected to be kept for at least one year) used in operations, when indicators of impairment are present and the undiscounted cash flows estimated to be generated by the type of asset are less than the asset’s carrying amounts, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Any loss on long-lived assets which are disposed are determined in a similar manner, however, the fair values are reduced for the cost of disposal. In 2021 and 2020, we do not believe we had any impairment of our long-lived assets.

Revenue Recognition

Our primary source of generating revenue is through the sale and rental of heavy equipment. In accordance with accounting rules, we recognize revenue when the customer obtains control of the promised equipment and reflect what we are paid in exchange for the equipment. To determine our revenue recognition depending upon whether the equipment is sold or leased, we perform the following five steps: (i) identify the contract(s) with the customer; (ii) identify the performance obligations in the contract; (iii) calculate the transfer price; (iv) allocate the transaction price to the performance obligation in the contract; and (v) recognize revenue when (or as) the customer satisfies a performance obligation. In the event any revenue does not meet these recognition criteria, such revenue will be deferred.

Equipment Sales – We recognize revenue from the sale of equipment upon delivery of the equipment to the customer and passing the risk of loss to the customer, and when we have no other significant obligations with regard to the equipment and collectability of the revenue from the customer is reasonably assured.

Equipment Rentals – Our rental revenues are made up of short-term agreements with monthly or annual terms. We recognize rental revenues in the month rental payments are due based upon the accrual method of accounting. Our equipment lease agreements contain varying terms, but typically range from one to five years for commercial entities. In addition to commercial entities, we also have lease agreements with various governments that have terms of 12 to 24 months and contain options to renew annually through five years. When lease terms are completed, and depending on the specific lease agreement, our customers may have the option to return the equipment, to renew the lease term, purchase the equipment at fair market value, or continue to rent the equipment on a month-to-month basis. Our agreements do not contain provisions for contingent rentals, which would allow rentals to cease or continue based upon certain defined events. Rental revenues for equipment leases are recognized upon receipt. Our initial direct costs for rental equipment are capitalized and amortized over the expected term of the applicable lease. To date, initial direct costs for operating leases have not been significant.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item. 

AMERAMEX INTERNATIONAL, INC.
INDEX TO FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Stockholders and Board of Directors of AmeraMex International, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of AmeraMex International, Inc. (the "Company") as of December 31, 2021 and 2020, and the related statements of operations, stockholders' equity, and cash flows for the years then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ dbbmckennon (3501)

We have served as the Company's auditor since 2017.

Newport Beach, California

March 31, 2022

The accompanying notes are an integral part of these financial statements 

AMERAMEX INTERNATIONAL, INC.

STATEMENTS OF OPERATIONS 

The accompanying notes are an integral part of these financial statements 

AMERAMEX INTERNATIONAL, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE YEARS ENDED DECEMBER 30, 2021 AND 2020

The accompanying notes are an integral part of these financial statements  

  AMERAMEX INTERNATIONAL, INC.

STATEMENTS OF CASH FLOW 

The accompanying notes are an integral part of these financial statements 

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

On February 9, 2021, the Company received a second Paycheck Protection Program (PPP) Loan in the amount of $254,147. We received 100% forgiveness of this PPP Loan on November 03, 2021. On April 6, 2021, we received notice that the SBA had increased the limit on the COVID EIDL from $150,000 to $500,000. We requested the increase which funded to an incorrect bank account on August 1, 2021. We have corrected this error with the SBA and are still awaiting funding.

Moving forward, we expect to generate sufficient cash flows from operations to meet our obligations, and we expect to continue to obtain financing for equipment purchases in the normal course of business. We believe that our expected cash flows from operations, together with our current and future credit facility, will be sufficient to operate in the normal course of business for next 12 months from the issuance date of these financial statements.

Basis of Presentation

The accompanying financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and Generally Accepted Accounting Principles (U.S. GAAP). In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included. Such adjustments consist of normal recurring adjustments.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements include the allowance for doubtful accounts, inventory reserve, valuation allowance for deferred taxes, and estimated useful life of property and equipment.

Cash

Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. At times, cash deposits may exceed FDIC- insured limits. As of December 31, 2021, we exceeded the FDIC-insured limit by $745,222 and in 2020 we exceeded the FDIC-insured limit by $157,078.

The Company has not experienced any losses related to a concentration of cash or cash equivalents in an FDIC insured financial institution.

Accounts Receivable

The Company grants credit to customers under credit terms that it believes are customary in the industry and does not require collateral to support customer receivables. The Company provides an allowance for doubtful collections, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. As of December 31, 2021 and 2020, the allowance for doubtful accounts was $33,093 and $120,569, respectively.

Inventory

Inventory consists of used equipment held for sale, as well as parts and attachments. Inventory is valued at the lower of the inventory’s cost (specific identification or first in, first out basis) or the current market price of the inventory, less costs to sell. Expenditures for inbound transportation and refurbishment costs, including parts and labor which add to the value of the inventory are capitalized. Management compares the cost of inventory with its market value and an allowance is made to write down inventory to market value, if lower.

Property and Equipment, and Rental Equipment

Property and equipment and rental equipment are stated at cost. Expenditures for maintenance and repairs are expensed as incurred; additions, renewals and improvements, which extend the useful life of the assets, are capitalized. When these assets are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation is provided using the straight-line method for substantially all assets with estimated lives as follows:

Other Assets

Other assets at December 31, 2021 and 2020 consist principally of cash surrender value of life insurance policies.

Long-Lived Assets

 The Company applies the provisions of Accounting Standards Codification (ASC) Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review as of December 31, 2021 and 2020, the Company believes there was no impairment of its long-lived assets.

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and equivalents, restricted cash, accounts receivable, advances to suppliers, accounts payable, accrued liabilities and short-term debt, the carrying amounts approximate their fair values due to their short maturities.

Financial Accounting Standards Board (FASB) ASC Topic 820, Fair Value Measurements and Disclosures, requires disclosure of the fair value of financial instruments held by the Company. FASB ASC Topic 825, Financial Instruments, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020

The Company analyzes all financial instruments with features of both liabilities and equity under FASB ASC Topic 480, Distinguishing Liabilities from Equity, and FASB ASC Topic 815, Derivatives and Hedging.

As of December 31, 2021 and 2020, respectively, the Company did not identify any assets and liabilities required to be presented on the balance sheet at fair value.

Revenue Recognition

The Company generates revenues primarily through the sale and rental of heavy equipment. In May 2014 and in subsequent updates, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, as amended, and referred herein as ASC 606. ASC 606 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASC 606 requires that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. It also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASC 606 was effective for interim and annual periods beginning after December 15, 2017.

Effective January 1, 2018, the Company adopted ASC 606, with no significant impact on our financial statements. In accordance with ASC 606, the Company recognizes revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods and services. To determine revenue recognition for arrangements that the Company deems are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) calculate transfer price; (iv) allocate the transaction price to the performance obligation in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Any revenues that do not meet these recognition criteria will be deferred.

Equipment Sales

The Company recognizes revenue from equipment sales upon delivery of the equipment to the customer when the risk of loss passes to the customer and, no other significant obligations of the Company exist and collectability is reasonably assured.

Equipment Rentals

Rental revenues comprise of short-term agreements that can have monthly or annual terms. Rental revenues are recognized in the month they are due on the accrual basis of accounting. Our operating lease agreements have varying terms, typically one to five years with commercial entities. We also have agreements governmental entities that are 12 to 24 months in length, with options to renew annually through year five. Upon lease termination, customers, depending in the individual lease agreements, may have the option to return the equipment, to renew the lease term, purchase the equipment at fair market value, or continue to rent on a month-to-month basis. Our operating leases do not provide for contingent rentals. Revenues related to operating leases are recognized on a straight-line basis over the term of the lease. Negotiated lease early-termination charges are recognized upon receipt. Initial direct costs are capitalized and amortized over the expected term of the leases. To date, initial direct costs for operating leases have not been insignificant.

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020

Shipping and Handling

Costs incurred for shipping and handling of equipment sold to customers are included in costs of goods sold in the statements of income.

Sales Tax

Sales tax collected from customers is initially recorded as a liability and then remitted in a timely manner to the appropriate governmental entity.

Warranty Costs

Generally, the Company sells its equipment with no warranty. In the event we determine we should repair equipment, we may do so at our election. In the event a do so, such costs are expensed as incurred.

Stock-Based Compensation

The Company records stock-based compensation in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. FASB ASC Topic 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity- based compensation issued to employees and non-employees. There were no stock options outstanding as of December 31, 2021 and 2020 and no shares issued for compensation during the years then ended.

Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

Basic and Diluted Earnings Per Share  

Earnings per share is calculated in accordance with ASC Topic 260, Earnings Per Share. Basic earnings per share (EPS) is based on the weighted average number of common shares outstanding. Diluted EPS is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. There were no potentially dilutive securities outstanding during 2021 and 2020.

Concentrations

At December 31, 2021, 59% of the accounts receivable was due from the Construction (14%), Logistics (22%) and Forestry (23%) industries and at December 31, 2020, 53% of the accounts receivable was due from the Government (12%), Forestry (15%) and Logistics (26%) industries. The loss of one of these customers would significantly impact the Company. For the year ended December 31, 2021, one customer accounted for 10% or more of sales and in 2020, three customers accounted for 10% or more of sales.

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020

Recent Accounting Pronouncements

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfer of Assets Other than Inventory, which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. ASU 2016-16 is effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The Company is in the process of evaluating the impact of this accounting standard update on its financial statements.

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 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 adopted 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.

Other recent accounting pronouncements issued by the FASB, the American Institute of Certified Public Accountants, and the SEC did not or are not believed by management to have a material impact on the Company's present or future financial statements.

Note 3 – Inventory

Inventory as of December 31, 2021 and 2020 consisted of the following:

All the inventory is used as collateral for the notes payable (see Notes 6 and 7).

Note 4 – Property and Equipment

Property and equipment includes assets held for internal use; as of December 31, 2021 and 2020, such consisted of the following:

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020

Depreciation Expense for the years ended December 31, 2021 and 2020 was $273,921 and $285,952, respectively. All the property and equipment is used as collateral for the line of credit and notes payable (see Notes 6 and 7).

Note 5 – Rental Equipment

Rental equipment as of December 31, 2021 and 2020 consisted of the following:

Depreciation expense for the years ended December 31, 2021 and 2020 was $642,404 and $942,400, respectively. All the rental equipment is used as collateral for the line of credit and notes payable (see Notes 6 and 7).

Note 6 – Lines of Credit

The Company has a line of credit (flooring plan) with a finance company that provides for borrowing up to $1,050,000. The line of credit is secured by the equipment purchased and is interest free if paid within 180 days from finance date. After 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 its own calculations based on the date of purchase. At December 31 2021 and 2020, the amounts outstanding under this line of credit agreement were $23,026 with $1,026,974 available and $314,000 with $736,000 available, respectively. Interest expense for 2021 and 2020 was $10,250 and $3,841, respectively. The agreement has no expiration date provided the Company does not default.

The Company has line of credit with a finance company that provides for borrowing and refinancing up to $6.5 million, as amended. The credit facility expires April 28, 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 the Company assets, other than those specifically secured by an existing agreement. At December 31 2021 and 2020, the amounts outstanding under this line of credit agreement were $3,157,941 with $3,342,059 available for purchases and $5,435,401 with $1,064,596 available, respectively. Interest expense for 2021 and 2020 was $471,583 and $569,208, respectively.

Note 7 – Notes Payable

The Company uses credit to finance the purchase of heavy equipment on a short-term and long-term basis and secured by specific pieces of equipment. Notes payable as of December 31, 2021 and 2020, consisted of the following:

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020

From time to time, the Company’s Chief Executive Officer provides a personal guarantee on certain of the equipment loans above.

Aggregate future annual maturities of notes payable as of December 31, 2021, are as follows:

Note 8 – Related-Party Transactions

Related-Party Note Payable

The Company has a note payable to the Company’s Chief Executive Officer. Funds were received years ago to fund operations. The note is interest bearing at 10% per annum, unsecured and payable upon demand. The balance of the note at December 31, 2021 and 2020 was $0 and $226,659, respectively. During the years ended December 31, 2021 and 2020, the Company repaid $262,357 and $108,135, respectively, of this note payable. The note incurred $35,698 and $36,936 in interest expense for the years ended December 31, 2021 and 2020 respectively.

Lease

The Company leases a building and real property in Chico, California under a lease agreement renewing annually every March from a trust whose trustee is the Company’s Chief Executive Officer. The lease provides for monthly lease payment of $12,000 per month. Rent expense for the years ended December 31, 2021 and 2020 were $144,000 and $139,600, respectively. 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020

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 December 31, 2021 and December 31, 2020, have a combined total due of $109,482 and $168,151 respectively. The brokerage made $42,681 on the transactions. The notes are secured by the equipment.

The Company also has one note payable that was brokered through the same Director’s company. The note is secured with equipment and as of December 31, 2021 and 2020 has a total due of $195,133 and $744,424, respectively.

Note 9 – 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 WA for $1,089,000. The machines were titled in the Company’s name, and accordingly, revenues are costs are recorded in the Company’s financial statements. At December 31, 2021, the Company had repaid $297,000 for equipment sold. During the same time period, the Company also remitted $382,369 in joint venture profits. The amount due to the collaborator for the years ended December 31, 2021 and 2020 was $142,500 and $439,500, respectively.

Note 10 – Convertible Notes

On July 20, 2020 and again on September 16, 2020, the Company and Geneva Roth Remark Holdings, Inc., a New York corporation (“Geneva”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) by which the Geneva 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”). The July 20, 2020 note was paid in full on January 15, 2021. The September 16, 2020 note was paid in full on March 19, 2021.

On January 21, 2021, the Company entered into a securities purchase agreement with Geneva whereby Geneva purchased 103,500 shares of our Series A Preferred Stock for a purchase price of $103,500. After payment of transaction-related expenses, net proceeds to us were $100,000. The proceeds were used for working capital. On July 26, 2021, the Company paid $146,616 to pay off the securities purchase agreement with Geneva in full and the 103,500 shares of Series A Preferred Stock were returned to (and cancelled by) the Company.

On March 23, 2021 , the Company entered into a securities purchase agreement with Geneva whereby Geneva purchased 78,000 shares of our Series A Preferred Stock for a purchase price of $78,000. After payment of transaction-related expenses, net proceeds to us were $75,000. The proceeds were used for working capital. The Series A Preferred Stock earns dividends at a rate of 10% per annum, and dividends at a default rate of 22%. On September 21, 2021, the Company paid $110,493 to pay off the securities purchase agreement with Geneva in full and the 78,000 shares of Series A Preferred Stock were returned to (and cancelled by) the Company.

All issuances were exempt from the registration requirements of Section 5 of the Securities Act of 1933 as they did not involve a public offering under Section 4(a)(2) and were issued as restricted securities as defined in Rule 144 of the Act. 

AMERAMEX INTERNATIONAL, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2021 and 2020

Note 11 – Commitments and Contingencies

From time to time, the Company is involved in routine litigation that arises in the ordinary course of business. As of December 31, 2021, the Company is not involved in any litigation.

See Note 8 for related party operating lease.

Note 12 – Stockholders’ Equity

The Company has authorized 5,000,000 shares of $0.001 par value preferred stock, of which 1,000,000 shares have been designated as Series A Convertible Preferred Stock of which zero shares were issued and outstanding as of December 31, 2021 and 2020.

The Company has authorized 1,000,000,000 shares of $0.001 par value common stock, of which 14,629,155 and 14,549,155 were issued and outstanding as of December 31, 2021 and 2020, respectively.