Attached files
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| 8-K - FORM 8-K - TX Holdings, Inc. | t77924_8k.htm |
Exhibit 99.1
TX HOLDINGS REPORTS 2013 RESULTS
REVENUE FOR 2013 INCREASED 111%
FIRST FULL YEAR REPORTING NET INCOME
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Revenue for year ended September 30, 2013 increased 111% as compared to 2012
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Net income for year ended September 30, 2013 was $326,977 as compared to a net loss in 2012
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Gross profit for year ended September 30, 2013 increased 228% as compared to 2012
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First full year in which company has posted net income
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ASHLAND, Kentucky - December 3, 2013 - TX Holdings, Inc.,( the “Company”),(OTC Markets OTCQB: TXHG), a supplier of mining and rail products to the U.S. coal mining industry, today announced financial results for its 2013 fiscal year. The Company has continued to post increased sales and announced that 2013 is the first full year in which it has reported a profit.
Mr. Shrewsbury, the Company’s CEO and Chairman, stated that “We are pleased to announce that we have had an important turn-around year, with sales having reached $4.89 million. Our earnings growth for 2013 has helped strengthen our balance sheet. We anticipate this trend to continue in 2014. Our full year’s results confirm the efficacy of our decision to expand and re-focus our business and reflect the gradual and continued acceptance of our products in the industry.
Mr. Shrewsbury further stated: “We are extremely pleased with our sales and operating results for 2013. Although as previously announced, we commenced showing positive net income in the second fiscal quarter, 2013 is our first full year of profitability. We will continue to strive to build shareholder value by focusing our efforts on increasing sales to existing customers, while maintaining good relations with such customers through our customer service efforts. We will endeavor to provide excellent products at competitive prices, and assuring timely delivery, while containing our costs and operational expenses. During 2014, we hope to build on these efforts by further expanding our customer base and product offerings while carefully managing our finances.”
Fiscal 2013 Financial Summary
Revenue for fiscal 2013 was $4.89 million, an increase of $2.57 million or 111% compared to 2012.
Gross profit for 2013 was $1.56 million, an increase of $1.09 million or 228% compared to 2012.
Net income for 2013 was $326,977 compared to a net loss of $499,501 for 2012, an increase of $826,478.
Earnings per diluted share were $0.01 compared to a loss per diluted share of $(0.01) in 2012.
Cost of goods sold was $3.33 million compared to $1.85 million in 2012, an increase of $1.49 million or 80.4%, from higher sales volume.
Operating expenses for 2013 were $1.16 million compared to $918,230 in 2012, an increase of $245,083 or 27%. Other expenses for 2013 were $73,322 compared to $57,466 for 2012, an increase of $15,856 or 28%.
Cash used in operating activities for 2013 was $237,464 and resulted from the continued effort to increase inventory from prior year-end levels to meet projected increases in sales demand. Cash needs for inventory growth was minimized by an increase in accounts payable and the net income realized during 2013. At September 30, 2013, the company had a cash balance of $175,028, an increase of $171,893 when compared to 2012. To fund ongoing operations, the company continued to rely upon financing provided by its CEO, including demand notes and advances of $1.85 million, and a secured bank line of credit of which $248,500 had been drawn upon at year end.
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA) and other applicable law. When used, the words “believe”, “anticipate”, “estimate”, “project”, “should”, “expect”, “plan”, “assume” and similar expressions that do not relate solely to historical matters identify forward-looking statements. Forward-looking statements are based on the Company’s current assumptions regarding future business and financial performance. Forward-looking statements concerning future plans or results are necessarily only estimates and actual results could differ materially from expectations. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the following: our ability to implement our business strategy; our financial strategy; a downturn in economic environment; our failure to meet growth and productivity objectives; a failure of our innovation initiatives; risks from investing in growth opportunities; fluctuations in financial results and purchases; the impact of local legal, economic, political and health conditions; adverse effects from environmental matters and tax matters; ineffective internal controls; our use of accounting estimates; our ability to attract and retain key personnel and our reliance on critical skills; impact of relationships with critical suppliers; currency fluctuations and customer financing risks; the impact of changes in market liquidity conditions and customer credit risk on receivables; our reliance on third party distribution channels; Securities and Exchange Commission regulations related to trading in “penny stocks;” the continued availability of certain financing provided by our CEO; and other risks, uncertainties and factors discussed in our Quarterly Reports on Forms10-Q, our Annual Report on Form 10-K and in our other filings with the SEC or in materials incorporated therein by reference. Any forward-looking statement in this release speaks only as of the date on which it is made. We assume no obligation to update or revise any forward-looking statement. Notwithstanding the above, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1933, as amended, expressly state that the safe harbor for forward looking statements does not apply to companies that issue penny stocks. Because we may from time to time be considered to be an issuer of penny stock, the safe harbor for forward looking statements under the PSLRA may not be apply to us at certain times.
Contact:
William “Buck” Shrewsbury
Chairman and CEO
TX Holdings, Inc.
(606) 928-1131
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TX HOLDINGS, INC.
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BALANCE SHEETS
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September 30, 2013 and 2012
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September 30,
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September 30,
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2013
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2012
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 175,028 | $ | 3,135 | ||||
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Accounts receivable, net of allowance for doubtful accounts of $13,993 and $0, respectively
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425,930 | 200,275 | ||||||
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Inventory
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1,849,987 | 771,977 | ||||||
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Commission advances
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3,546 | 56,375 | ||||||
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Note receivable-current
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10,000 | 10,000 | ||||||
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Other current assets
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23,275 | 43,771 | ||||||
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Total current assets
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2,487,766 | 1,085,533 | ||||||
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Property and equipment, net
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43,387 | 55,797 | ||||||
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Note receivable, less current portion
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27,380 | 30,000 | ||||||
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Other
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200 | 50,200 | ||||||
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Total Assets
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$ | 2,558,733 | $ | 1,221,530 | ||||
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LIABILITIES AND STOCKHOLDERS’ DEFICIT
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Current liabilities:
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Accrued liabilities
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$ | 889,885 | $ | 788,185 | ||||
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Accounts payable
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692,180 | 279,655 | ||||||
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Advances from stockholders/officers
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499,583 | 307,082 | ||||||
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Bank-line of credit
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248,500 |
–
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Total current liabilities
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2,330,148 | 1,374,922 | ||||||
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Notes payable to a stockholder
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1,351,997 | 1,351,997 | ||||||
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Asset retirement obligation
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–
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5,000 | ||||||
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Total Liabilities
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3,682,145 | 2,731,919 | ||||||
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Commitments and contingencies
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Stockholders’ deficit:
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Preferred stock: no par value, 1,000,000 shares authorized no shares outstanding
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–
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–
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Common stock: no par value, 250,000,000 shares authorized, 48,053,084 and 46,553,084 shares issued and outstanding at September 30, 2013 and September 30, 2012, respectively
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9,293,810 | 9,233,810 | ||||||
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Additional paid-in capital
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4,304,280 | 4,304,280 | ||||||
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Accumulated deficit
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(14,721,502 | ) | (15,048,479 | ) | ||||
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Total stockholders’ deficit
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(1,123,412 | ) | (1,510,389 | ) | ||||
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Total Liabilities and Stockholders’ Deficit
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$ | 2,558,733 | $ | 1,221,530 | ||||
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TX HOLDINGS, INC.
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STATEMENTS OF OPERATIONS
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For the Years Ended September 30, 2013 and 2012
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September 30,
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September 30,
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2013
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2012
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Revenue
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$ | 4,894,529 | $ | 2,322,525 | ||||
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Cost of goods sold
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3,330,917 | 1,846,330 | ||||||
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Gross profit
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1,563,612 | 476,195 | ||||||
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Operating expenses, except items shown separately below
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440,250 | 434,320 | ||||||
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Commission expense
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544,295 | 228,828 | ||||||
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Professional fees
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161,683 | 216,201 | ||||||
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Stock-based compensation
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–
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27,040 | ||||||
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Depreciation expense
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17,085 | 11,841 | ||||||
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Total operating expenses
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1,163,313 | 918,230 | ||||||
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Income/(loss) from operations
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400,299 | (442,035 | ) | |||||
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Other income and (expense):
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Gain/(loss) on disposal of fixed assetst
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2,031 | (12,064 | ) | |||||
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Gain on extinguishment of accrued liabilities
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32,458 | 62,719 | ||||||
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Bad debt expense
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(15,951 | ) |
–
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Other income
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–
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7,506 | ||||||
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Interest expense
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(91,860 | ) | (115,627 | ) | ||||
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Total other income and (expenses), net
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(73,322 | ) | (57,466 | ) | ||||
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Income (loss) before provision for income taxes
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326,977 | (499,501 | ) | |||||
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Provision for income taxes
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135,000 |
–
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Utilization of net operating loss carry forward
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(135,000 | ) |
–
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Net income/(loss)
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$ | 326,977 | $ | (499,501 | ) | |||
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Net earnings/(loss) per common share
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Basic
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$ | 0.01 | $ | (0.01 | ) | |||
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Diluted
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$ | 0.01 | $ | (0.01 | ) | |||
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Weighted average of common shares outstanding-
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Basic
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47,892,810 | 50,639,594 | ||||||
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Diluted
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48,542,810 | 50,639,594 | ||||||
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TX HOLDINGS, INC.
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STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
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For the Years Ended September 30, 2013 and 2012
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Additional
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Preferred Stock
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Common Stock
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Paid in
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Accumulated
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Shares
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Amount
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Shares
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Amount
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Capital
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Deficit
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Total
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Balance at
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September 30, 2011
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– | $ | – | 53,271,897 | $ | 10,566,487 | $ | 1,379,409 | $ | (14,548,978 | ) | $ | (2,603,082 | ) | ||||||||||||||
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Warrants issued to
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an officer and the
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Board
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– | – | – | – | 27,040 | – | 27,040 | |||||||||||||||||||||
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Legal settlement
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against prior CEO
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and shareholder
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– | – | (6,718,813 | ) | (1,332,677 | ) | 2,897,831 | – | 1,565,154 | |||||||||||||||||||
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Net loss
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– | – | – | – | – | (499,501 | ) | (499,501 | ) | |||||||||||||||||||
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Balance at
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September 30, 2012
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– | $ | – | 46,553,084 | $ | 9,233,810 | $ | 4,304,280 | $ | (15,048,479 | ) | $ | (1,510,389 | ) | ||||||||||||||
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Common stock issued
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for professional
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services
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– | – | 1,500,000 | 60,000 | – | – | 60,000 | |||||||||||||||||||||
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Net income
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– | – | – | – | – | 326,977 | 326,977 | |||||||||||||||||||||
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Balance at
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September 30, 2013
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– | $ | – | 48,053,084 | $ | 9,293,810 | $ | 4,304,280 | $ | (14,721,502 | ) | $ | (1,123,412 | ) | ||||||||||||||
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TX HOLDINGS, INC.
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STATEMENTS OF CASH FLOWS
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For the Years Ended September 30, 2013 and 2012
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September 30,
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September 30,
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2013
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2012
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Cash flows used by operating activities:
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| Net income/(loss) | $ | 326,977 | $ | (499,501 | ) | |||
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Adjustments to reconcile net income/(loss) to net cash used in operating activities:
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Depreciation expense
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17,085 | 11,841 | ||||||
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Bad debt expense
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15,951 | – | ||||||
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Gain on extinguishment of accrued liabilities
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(32,458 | ) | (62,719 | ) | ||||
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Fair value of warrants issued to an officer and the Board
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– | 27,040 | ||||||
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Loss on settlement of accounts payable
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10,116 | – | ||||||
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Loss on sale of fixed assets
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– | 12,064 | ||||||
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Gain on sale of equipment
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(2,031 | ) | – | |||||
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Changes in operating assets and liabilities:
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Accounts receivable
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(241,606 | ) | (200,275 | ) | ||||
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Inventory
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(1,078,010 | ) | (771,977 | ) | ||||
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Commission advances
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52,829 | (81,375 | ) | |||||
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Other current assets
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20,496 | (43,971 | ) | |||||
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Deposits
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50,000 | – | ||||||
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Accrued liabilities
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134,158 | 200,601 | ||||||
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Accounts payable
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462,409 | 268,449 | ||||||
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Notes receivable
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2,620 | – | ||||||
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Stockholder/officers advances for operations
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24,000 | 18,000 | ||||||
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Net cash used in operating activities
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(237,464 | ) | (1,121,823 | ) | ||||
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Cash flows used in investing activities:
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Proceeds received on sale of assets
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5,500 | 40,000 | ||||||
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Purchase of equipment
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(13,144 | ) | (19,000 | ) | ||||
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Net cash provided by/(used in) investing activities
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(7,644 | ) | 21,000 | |||||
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Cash flows provided by financing activities:
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Proceeds from line of credit
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248,500 | – | ||||||
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Proceeds from stockholder/officer advances
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284,501 | 1,259,939 | ||||||
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Payment for settlement of debt
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– | (71,250 | ) | |||||
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Purchase of treasury stock
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– | (28,750 | ) | |||||
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Payments on stockholder/officer advances
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(116,000 | ) | (59,000 | ) | ||||
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Net cash provided by financing activities
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417,001 | 1,100,939 | ||||||
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Increase in cash and cash equivalents
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171,893 | 116 | ||||||
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Cash and cash equivalents at beginning of year
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3,135 | 3,019 | ||||||
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Cash and cash equivalents at end of year
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$ | 175,028 | $ | 3,135 | ||||
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Supplemental Cash Flow Disclosure
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Interest paid
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$ | 7,394 | $ | – | ||||
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