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. -0- *T
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
============ ============ *T
American Mold Guard CL B Wrt (MM) (NASDAQ:AMGIZ)
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American Mold Guard CL B Wrt (MM) (NASDAQ:AMGIZ)
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