Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - TX Holdings, Inc. | txhg20201106_8k.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE:
TX HOLDINGS REPORTS RESULTS FOR FISCAL YEAR ENDED SEPTEMBER 30, 2020
ASHLAND, Kentucky – November 4, 2020 - TX Holdings, Inc. (OTC Markets PINK: TXHG), a supplier of mining and rail products to the U.S. coal mining industry, today announced financial results for its 2020 fiscal year. During the 2020 fiscal year, the company reported annual revenue of $2,335,590, a 40.6% decrease when compared to the same period the prior year. Net income for fiscal year 2020 was $4,128, an income decrease of $38,316, when compared to a net income of $42,444 for the prior year.
Mr. Shrewsbury, the company’s CEO and Chairman, stated that
“Our 9/30/2020 year was very disappointing. The coal mining industry was negatively impacted by reduced consumption of coal due to slowing economic growth related to COVID-19 and efforts to mitigate it. We are currently seeing in the current quarter a positive change resulting in some mines reopening and an increase in orders”.
The U.S. Energy Information Administration (EIA), expects total U.S. coal production for 2020 to be 525 million short tons compared with 705 MMst in 2019, a 26% decrease. The coal industry has experienced reduced demand from the U.S. electric power sector amid low natural gas prices which have contributed to coal mines idling and mine closures. EIA expects coal production to rise o t625 MMst in 2021, up 19% from 2020.This forecast increase reflects rising demand for coal from U.S. electricity generators because of higher natural gas prices compared with 2020.
Fiscal Year 2020 - Financial Summary
Revenue for the year ended September 30, 2020 was $2,335,590 as compared to $3,934,689 for the same period in the prior year, a decrease of $1,599,099 or 40.6%.
Cost of goods sold was $1,883,735 as compared to cost of goods sold of $3,313,609 for the same period the prior year, a decrease of $1,429,874 or 43.2 %.
Gross profit for the year ended September 30, 2020 increased as a percentage of revenue from 15.8% to 19.4% when compared to the same period the prior year. The gross profit increase is the result of higher margin products sold in the current year.
Operating expenses for the year ended September 30, 2020 were $505,793 as compared to $552,307 for the twelve months ended September 30, 2019, a decrease of $46,514 or 8.4%.
Other income/expense for the year ended September 30, 2020 resulted in income of $58,606 as compared to a loss of $26,329 in the prior year. The favorable Other income/expense variance of $84,395 was the result primarily of a reduction in interest expense on the $2,000,000 promissory note due to Mr. William Shrewsbury, our chairman and CEO, who elected to forego any interest due to him by the Company for the year 2020.
Net income for the current year was $4,128, compared to a net income of $42,444, incurred in the fiscal year 2019.
At September 30, 2020, cash and cash equivalents were $24,082 compared to $17,098 at September 30, 2019. Net cash used in operating activities was $113,677 during the twelve months ended September 30,2020. Net cash used in operating activities was $64,331 during the same twelve months period in the prior year. Net cash used for investment in delivery equipment during the current fiscal year was $21,645 as compared to cash flow of $10,500 received from the sale of equipment the prior year. During the fiscal year ended September 30, 2020, net cash provided by financing activities was $142,296 due to an increase of stockholder’s advances. Cash flow provided by financing activities was $34,320 during the same period in the prior year.
Accounts receivable were $114,985 as of September 30, 2020, as compared to $275,356 as of September 30, 2020, a decrease of $160,371 or 58.2%.
Inventory was $2,039,391 as of September 30, 2020, an increase of $557,762 or 37.6% as compared to September 30, 2020. The Company has increased inventory in anticipation of higher sales in the 2021 fiscal year.
Contact:
William “Buck” Shrewsbury
Chairman and CEO
TX Holdings, Inc.
(606) 928-1131
|
TX HOLDINGS, INC. |
||||||
|
BALANCE SHEETS |
||||||
|
September 30, 2020 and 2019 |
|
September 30, |
September 30, |
|||||||
|
2020 |
2019 |
|||||||
|
ASSETS |
||||||||
|
Current assets: |
||||||||
|
Cash and cash equivalents |
$ | 24,082 | $ | 17,098 | ||||
|
Accounts receivable, net of allowance for doubtful accounts of $ 0 at September 30, 2020 and September 30, 2019 |
114,985 | 275,356 | ||||||
|
Inventory |
2,039,391 | 1,481,629 | ||||||
|
Other current assets |
483 | 2,158 | ||||||
|
Total current assets |
2,178,941 | 1,776,241 | ||||||
|
Inventory, non-current |
350,000 | |||||||
|
Property and equipment, net |
28,075 | 15,144 | ||||||
|
Total Assets |
$ | 2,207,016 | $ | 2,141,385 | ||||
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
||||||||
|
Current liabilities: |
||||||||
|
Accrued expenses, primarily to officers |
$ | 264,179 | $ | 329,179 | ||||
|
Accounts payable |
253,583 | 320,985 | ||||||
|
Accrued interest to officer |
559,726 | 559,726 | ||||||
|
Advances from officer |
388,287 | 181,487 | ||||||
|
Deferred revenue |
99,000 | 96,000 | ||||||
|
Stockholder/officers advances for operations-warehouse rent |
132,000 | 108,000 | ||||||
|
Bank-term loan-current portion |
429,866 | 69,011 | ||||||
|
Other current liability |
29,800 | 5,191 | ||||||
|
Total current liabilities |
2,156,441 | 1,669,579 | ||||||
|
Bank-term loan,less current portion |
– | 425,359 | ||||||
|
Note payable to officer |
2,000,000 | 2,000,000 | ||||||
|
Total Liabilities |
4,156,441 | 4,094,938 | ||||||
|
Commitments and contingencies |
– | – | ||||||
|
Stockholders' deficit: |
||||||||
|
Preferred stock: no par value, 1,000,000 shares authorized no shares outstanding |
||||||||
|
Common stock: no par value, 250,000,000 shares authorized, 48,053,084 shares issued and outstanding at September 30, 2020 and September 30, 2019 |
9,293,810 | 9,293,810 | ||||||
|
Additional paid-in capital |
4,321,329 | 4,321,329 | ||||||
|
Accumulated deficit |
(15,564,564 | ) | (15,568,692 | ) | ||||
|
Total stockholders' deficit |
(1,949,425 | ) | (1,953,553 | ) | ||||
|
Total Liabilities and Stockholders' Deficit |
$ | 2,207,016 | $ | 2,141,385 | ||||
|
TX HOLDINGS, INC. |
|
|
STATEMENTS OF OPERATIONS |
|
|
For the Years Ended September 30, 2020 and 2019 |
|
|
September 30, |
September 30, |
|||||||
|
2020 |
2019 |
|||||||
|
Revenue |
$ | 2,335,590 | $ | 3,934,689 | ||||
|
Cost of goods sold |
(1,883,735 | ) | (3,313,609 | ) | ||||
|
Gross profit |
451,855 | 621,080 | ||||||
|
Operating expenses, except items shown separately below |
383,179 | 399,106 | ||||||
|
Commission expense |
106,780 | 123,053 | ||||||
|
Professional fees |
4,611 | 8,359 | ||||||
|
Bad debt expense |
2,510 | 14,621 | ||||||
|
Depreciation expense |
8,713 | 7,168 | ||||||
|
Total operating expenses |
505,793 | 552,307 | ||||||
|
Income from operations |
(53,938 | ) | 68,773 | |||||
|
Other income and (expense): |
||||||||
|
Loss on disposal of property and equipment |
_ |
(7,000 | ) | |||||
|
Other income |
79,206 | 112,043 | ||||||
|
Interest expense |
(21,140 | ) | (131,372 | ) | ||||
|
Total other income and (expense), net |
58,066 | (26,329 | ) | |||||
|
Net income/(loss) |
$ | 4,128 | $ | 42,444 | ||||
|
Net income per common share |
||||||||
|
Basic |
$ | 0.00 | $ | 0.00 | ||||
|
Weighted average of common shares outstanding- |
||||||||
|
Basic |
48,053,084 | 48,053,084 | ||||||
|
TX HOLDINGS, INC. |
||||||||||
|
STATEMENTS OF CASH FLOWS |
||||||||||
|
For the Years Ended September 30, 2020 and 2019 |
|
September 30, |
September 30, |
|||||||
|
2020 |
2019 |
|||||||
|
Cash flows provided/(used) in operating activities: |
||||||||
|
Net income/(loss) |
$ | 4,128 | $ | 42,444 | ||||
|
Adjustments to reconcile net income/(loss) to net cash used in operating activities: |
||||||||
|
Depreciation expense |
8,714 | 7,168 | ||||||
|
Bad debt expense |
2,510 | 14,621 | ||||||
|
Loss on sale of fixed asset |
– | 7,000 | ||||||
|
Changes in operating assets and liabilities: |
||||||||
|
Accounts receivable, net |
157,861 | (30,283 | ) | |||||
|
Inventory |
(207,762 | ) | (33,089 | ) | ||||
|
Commission advances |
– | – | ||||||
|
Other current assets |
1,675 | (1,058 | ) | |||||
|
Accrued liabilities, primarily to officer |
(65,000 | ) | (87,457 | ) | ||||
|
Accounts payable |
(67,402 | ) | (208,868 | ) | ||||
|
Accrued interest to officers |
– | 100,000 | ||||||
|
Stockholder/officers advances for operations-warehouse rent |
24,000 | 24,000 | ||||||
|
Deferred revenue |
3,000 | 96,000 | ||||||
|
Other current liabilities |
24,609 | 5,191 | ||||||
|
Net cash used in operating activities |
(113,667 | ) | (64,331 | ) | ||||
|
Cash flows provided/(used) in investing activities: |
||||||||
|
Purchase of equipment |
(21,645 | ) | – | |||||
|
Proceeds from sale of fixed asset |
– | 10,500 | ||||||
|
Net cash provided/(used) in investing activities |
10,500 | 10,500 | ||||||
|
Cash flows provided/(used ) in financing activities: |
||||||||
|
Repayment of bank term loan |
(64,504 | ) | (54,680 | ) | ||||
|
Proceeds from officer advances |
354,800 | 219,500 | ||||||
|
Repayment of officer advances |
(148,000 | ) | (130,500 | ) | ||||
|
Net cash provided in financing activities |
142,296 | 34,320 | ||||||
|
Decrease in cash and cash equivalents |
6,984 | (19,511 | ) | |||||
|
Cash and cash equivalents at beginning of period |
17,098 | 36,609 | ||||||
|
Cash and cash equivalents at end of period |
$ | 24,082 | $ | 17,098 | ||||
|
Supplemental Disclosure of Cash Flow Information |
||||||||
|
Cash paid during the year for interest |
$ | 19,273 | $ | 28,928 | ||||