American Mold Guard Reports Second Quarter 2006 Results.SAN JUAN CAPISTRANO San Juan Capistrano (săn wän kăpĭsträ`nō), city (1990 pop. 26,183), Orange co., S Calif.; inc. 1961. San Juan Capistrano has some manufactures, including aircraft parts, medical apparatus, and boats, but the economy is , Calif. -- American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Mold Guard, Inc. (Nasdaq SC: AMGI AMGI Area Median Gross Income (low housing tax credit units tenancy) AMGI Agencia Mutua para la Garantía de las Inversiones , AMGIW, AMGIZ), an industry leader in the field of mold prevention services, today announced financial results for its second quarter ended June June: see month. 30, 2006. Second Quarter Results The company reported second quarter 2006 net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight of $2.6 million, an increase of 105 percent from $1.3 million for the second 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 second quarter of 2006 was $ 1.1 million, or 42.6 percent, an increase of 901 percent from the $110,377 gross margin for the second quarter of 2005. The gross margin increase was realized through less material usage and improved crew productivity on higher sales volume, as well as from a price increase that the company implemented in the beginning of the year. The company reported a net loss for the second quarter of 2006 of $3.55 million, or $1.57 per share, compared to a net loss of $1.39 million, or $1.50 per share, for the second quarter of 2005. Included in the second quarter 2006 net loss is interest expense of $1.9 million, that resulted from the accelerated recognition of deferred interest charges associated with current quarter debt repayments and $27,107 of charges related to equity-based compensation as a result of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R. The second quarter 2006 net loss increase from the prior year was primarily due to the increased cost of being a public company, investments in new service centers, marketing of the company brand and product and the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of unamortized interest expense related to pre-IPO pre-IPO An offering of a company's shares prior to the firm's initial public offering. Investing in a pre-IPO tends to be very risky, in part because the planned IPO may never take place. debt incurred by the company. The majority of the debt was repaid in the second quarter of 2006. The per share net loss information reflects the effect of the one-for-.340124209 reverse stock split, effective April 7, 2006. "We are executing on our plan to expand American Mold Guards mold prevention service to customers, having opened five new service centers this quarter" said Tom Blakeley, Chief Executive Officer. "I am pleased that our year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. sales in 2006 almost approximate 2005 full-year sales and that we continued to increase company gross margin through productivity improvements. With the IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. complete, the company is now positioned to continue to expand its service coverage and product offerings in an effort to accelerate our growth," concluded Mr. Blakeley. Third Quarter 2006 Outlook For the third quarter of 2006, the company is estimating revenue in the range of $3.1 to 3.6 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 at a price per unit of $13.00. Each unit consisted of two shares of common stock, two Class A warrants and two Class B warrants. The offering raised net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $16.0 million, after underwriter underwriter n. a company or person which/who underwrites an insurance policy, issue of corporate securities, business, or project. (See: underwrite) UNDERWRITER, insurances. One who signs a policy of insurance, by which he becomes an insurer. discounts. On May 23, 2006, the representative of the several underwriters of the initial public offering exercised an over- over- pref. 1. Above or upon in position: overpass; overcoat. 2. Superior in rank or importance: overlord. 3. allotment A portion, share, or division. The proportionate distribution of shares of stock in a corporation. The partition and distribution of land. ALLOTMENT. Distribution by lot; partition. Merl. Rep. h.t. 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 Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. discounts. On June 7, 2006, the representative of the several underwriters again exercised the over-allotment option and purchased 100,000 shares of Common Stock, 100,000 Class A warrants and 100,000 Class B warrants. This second exercise of the over-allotment option raised additional net proceeds of $.6 million, after underwriting discounts. The total gross proceeds from the company's initial public offering was approximately $19.5 million and the company realized aggregate net proceeds of approximately $17.8 million, after underwriting discounts. As noted in the company's offering prospectus, significant amounts of the net proceeds of the offering was used to repay outstanding debt of the company and will be used for working capital purposes. Conference Call and Webcast American Mold Guard will discuss its second quarter 2006 results, along with its revenue outlook for the third 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 866-406-5369 or you can access via a live webcast at http://www.vcall.com/IC/CEPage.asp?ID=106598. Prior to the call, the company intends to post on its website a copy of the company's current report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. dated July July: see month. 25, 2006 including its operating results for the quarter ended June 30, 2006. The company's web site can be accessed at www.americanmoldguard.com under "Investor Relations Investor relations The process by which the corporation communicates with its investors. / 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 California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , Texas, Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , Mississippi Mississippi, state, United StatesMississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by and Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and . Its customers include many of the largest national and regional home builders. Visit: www.americanmoldguard.com Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 regarding, among other things, statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc goals, plans and projections regarding the company's financial position, results of operations, market position, product and service development and market strategy. These statements may be identified by the fact that they use words or phrases such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "targets," "will likely result," "will continue," "may," "could" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert di·vert v. di·vert·ed, di·vert·ing, di·verts v.tr. 1. To turn aside from a course or direction: Traffic was diverted around the scene of the accident. 2. or change any of them, and could cause actual outcomes and results to differ materially from current expectations. These factors include, among other things, competitive product and service development, future broad market acceptance of mold prevention services, difficulties in raising additional capital in the future, difficulties and delays in establishing the "Mold Guard" brand, the impact of the absence of significant proprietary technology underlying our services, a continued and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. dependence on a limited number of customers, changes to the inventory levels of the company's raw materials suppliers, the impact of a continued absence of exclusive or long-term commitments from the company's customers, changes in the anticipated size or trends of the markets in which the company competes, judicial decisions and governmental laws and regulations, and changes in general economic conditions in the markets in which the company may compete. For further details and a discussion of these and other risks and uncertainties, see the company's periodic reports including current reports on Form 8- K, quarterly reports on Form 10-Q Form 10-Q See 10-Q. and the annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , furnished fur·nish tr.v. fur·nished, fur·nish·ing, fur·nish·es 1. To equip with what is needed, especially to provide furniture for. 2. to and filed with the Securities and Exchange Commission. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
AMERICAN MOLD GUARD, INC.
CONDENSED CONSOLIDATED (UNAUDITED) STATEMENTS OF OPERATIONS
----------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2005 2006 2005 2006
----------------------------------------------------------------------
Revenue, Net $1,264,174 $2,591,968 $2,259,873 $5,353,622
Cost of Revenue
Direct Costs 1,129,028 1,449,341 1,836,123 3,013,296
Depreciation
Expense 24,769 38,056 45,041 71,614
----------------------- -----------------------
Total Cost of
revenue 1,153,797 1,487,397 1,881,164 3,084,910
Gross Margin 110,377 1,104,571 378,709 2,268,712
======================== =======================
Selling, general
and Administrative
expenses 1,267,119 2,738,263 2,331,949 4,302,568
------------------------ -----------------------
Loss from operations (1,156,742) (1,633,692) (1,953,240) (2,033,856)
Interest Expense,
net (230,875) (1,913,352) (394,714) (2,642,050)
------------------------ -----------------------
Loss before provision
for taxes (1,387,617) (3,547,044) (2,347,954) (4,675,906)
Provision for taxes 150 965 950 4,833
------------------------ -----------------------
Net Loss (1,387,767) (3,548,009) (2,348,904) (4,680,739)
======================== =======================
Dividends on cumulative
preferred stock 33,066 11,720 185,463 304,163
======================== =======================
Net Loss applicable
to common
shareholders (1,420,833) (3,559,729) (2,534,367) (4,984,902)
======================== =======================
Basic and diluted
net loss per share $(1.50) $(1.57) $(2.56) $(2.92)
======================== =======================
Dividends accumulated
for the year on
cumulative preferred
stock $(0.04) $(0.01) $(0.20) $(0.19)
======================== =======================
Net Loss attributable
to common stock per
share $(1.54) $(1.58) $(2.76) $(3.11)
======================== =======================
Weighted average
number of common
shares outstanding
basic and diluted 923,798 2,260,871 917,676 1,601,586
======================== =======================
AMERICAN MOLD GUARD, INC.
CONDENSED CONSOLIDATED (UNAUDITED) BALANCE SHEET
----------------------------------------------------------------------
December 31, June 30,
2005 2006
----------------------------------------------------------------------
ASSETS
Current Assets:
Cash & cash equivalents $67,782 $9,241,229
Accounts receivable, less allowance
for doubtful accounts 1,257,356 1,616,260
Inventories 38,039 61,320
Deferred Offering Costs 620,882 0
Deposits 115,935 349,573
Other Current Assets 80,122 58,658
------------- -------------
Total Current Assets 2,180,116 11,327,041
Property & Equipment 309,465 635,670
Intangible Assets 2,536 1,522
------------- -------------
TOTAL ASSETS $2,492,117 $11,964,232
============= =============
LIABILITIES AND SHAREHOLDERS DEFICIENCY
Current Liabilities
Accounts payable and accrued liabilities $1,908,415 $1,776,920
Lease Line of Credit - 294,539
Accrued payroll-related expenses 1,687,833 1,293,938
Short term notes payable 3,129,986 176,581
Accrued interest payable 372,326 126,229
------------- -------------
Total Current Liabilities 7,098,560 3,668,207
------------- -------------
Long-term liabilities
Long-term notes payable, net of discount 835,089 -
------------- -------------
Total Liabilities $7,933,649 $3,668,207
------------- -------------
Shareholders' Deficiency
Series A Preferred Stock 625,000 -
Series B Preferred Stock 859,000 -
Common Stock 1,475,262 16,578,041
Additional paid-in capital 2,005,289 6,804,807
Accumulated deficiency (10,406,083) (15,086,823)
------------- -------------
Total Shareholders' Deficiency (5,441,532) 8,296,025
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS'
DEFICIENCY $2,492,117 $11,964,232
============= =============
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