TX Holdings Reports Second Quarter Results for 2017 Fiscal Year

ASHLAND, KY / ACCESSWIRE / April 28, 2017 / TX Holdings, Inc. (OTC PINK: TXHG), a supplier of mining and rail products to the U.S. coal mining industry, today announced financial results for the second quarter of fiscal 2017. During the 2017 second fiscal quarter, the company reported quarterly revenue of $923,403, a 63.5% increase when compared to the same quarter in the prior year. Net loss for the second quarter of fiscal 2017 was $54,059, an increase of $2,955 when compared to a net loss of $51,104 for the same period in the prior year.

Mr. Shrewsbury, the company’s CEO and Chairman, stated, “We are encouraged by our current quarter sales demand increase, we continue to seek expansion in our customer base, and prior customers’ mines have started to re-open, contributing to recent higher sales in our rail, as well as our mining related products. The recent energy outlook by The U.S. Energy Information Administration has reported an expected increase in coal-fired electricity generation to contribute a 4% and 2% increase in coal production on 2017 and 2018, respectively, denoting a positive turn in the coal mining industry.”

Second Quarter 2017 Financial Summary

Revenue for second quarter 2017 was $923,403, an increase of $358,490, or 63.5%, compared to 2016.

Cost of goods sold for the current quarter was $804,9642, compared to $394,611 in 2016, an increase of 104.0%.

Gross profit for the second quarter of 2017 was $118,439, and decreased as a percentage of revenue to 12.8% from 30.1% compared to 2016.

Net loss for second quarter 2017 was $54,059, compared to a net loss in the same quarter of 2016 of $51,104.

Earnings (loss) per diluted share was $0.00, remaining unchanged from 2016.

Operating expenses decreased 25.5%, as compared to the same quarter of fiscal 2016. Other expenses in the second quarter 2017 were $29,764, compared to other expense of $29,744 in 2016.

Cash provided by operating activities for the three months ended March 31, 2017 was $36,366, as compared to cash used in operating activities of $124,484 during same period in 2016. The increase was a direct result of an increase in accounts payable of $208,265 and a decrease in inventory of $302,491 partially offset by an increase in accounts receivable of $425,783 during the three months ended March 31, 2017. Cash flows used by financing activities decreased by $17,227 due to payment on our term loan of $24,427 and a net advance from stockholder/officer of $7,200. At March 31, 2017, the company had cash and cash equivalents of $22,201, an increase of $19,139 when compared to September 30, 2016.

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: reliance upon indebtedness furnished or guaranteed by our CEO; risks related to substantial indebtedness; 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 Form10-Q, our Annual Reports 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 1934, 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

TX HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2017 and September 30, 2016

Unaudited

March 31,

September 30,

2017

2016

ASSETS

(Reclassified)

Current assets:

Cash and cash equivalents

$
22,201

$
3,062

Accounts receivable, net of allowance for doubtful

accounts of $113,643 at March 31, 2017 and September 30, 2016

660,280

235,402

Inventory

1,503,527

1,806,018

Commission advances

48,406

68,718

Note receivable-current

10,000

Other current assets

1,337

136

Total current assets

2,245,751

2,123,336

Inventory, non-current

300,000

Property and equipment, net

51,881

56,779

Note receivable, less current portion

19,983

Other

500

Total Assets

$
2,618,115

$
2,500,598

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:

Accrued liabilities

$
872,248

$
831,053

Accounts payable

833,352

625,087

Advances from officer

205,837

198,637

Bank-term loan-current portion

69,011

61,430

Total current liabilities

1,980,448

1,716,207

Bank-term-loan, less current portion

568,674

600,682

Note payable to officer

2,000,000

Total Liabilities

4,549,122

4,316,889

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 March 31, 2017 and September 30, 2016

9,293,810

Additional paid-in capital

4,321,329

Accumulated deficit

(15,546,146
)

(15,431,430
)

Total stockholders’ deficit

(1,931,007
)

(1,816,291
)

Total Liabilities and Stockholders’ Deficit

$
2,618,115

$
2,500,598

TX HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months and Six Months Ended March 31, 2017 and March 31, 2016

Unaudited

THREE MONTHS ENDED

SIX MONTHS ENDED

March 31,

2017

2016

2017

2016

Revenue

$
923,403

$
564,913

$
1,420,320

$
1,347,178

Cost of goods sold

(804,964
)

(394,611
)

(1,201,777
)

(938,457
)

Gross profit

118,439

170,302

218,543

408,721

Operating expenses, except items shown

separately below

103,892

133,597

201,836

254,297

Commission expense

32,839

35,541

56,356

63,373

Professional fees

3,554

20,075

7,620

41,421

Bad debt expense

–

905

1,926

Depreciation expense

2,449

4,898

Total operating expenses

142,734

191,662

271,615

365,915

Income (loss) from operations

(24,295
)

(21,360
)

(53,072
)

42,806

Other expense

Interest expense

(29,764
)

(29,744
)

(61,644
)

(63,278
)

Total other expense

(29,764
)

(29,744
)

(61,644
)

(63,278
)

Net loss

$
(54,059
)

$
(51,104
)

$
(114,716
)

$
(20,472
)

Net earnings (loss) per common share

Basic and Diluted

$
0.00

Weighted average of common shares

outstanding-

Basic and Diluted

48,053,084

The accompanying notes are an integral part of the consolidated financial statements.

TX HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended March 31, 2017 and 2016

(Unaudited)

March 31,

2017

2016

Cash flows provided/(used) in operating activities:

Net loss

$
(114,716
)

$
(20,472
)

Adjustments to reconcile loss to net cash used

in operating activities:

Depreciation expense

4,898

Bad debt expense

905

1,926

Changes in operating assets and liabilities:

Accounts receivable

(425,783
)

63,173

Inventory

302,491

(165,635
)

Commission advances

20,312

(7,173
)

Other current assets

(1,201
)

1,538

Accrued liabilities

23,195

29,305

Accounts payable

208,265

(44,044
)

Stockholder/officers advances for operations

18,000

12,000

Net cash provided/(used) in operating activities

36,366

(124,484
)

Cash flows provided/(used) in investing activities:

Net cash provided/(used) in investing activities

–

Cash flows provided/(used) by financing activities:

Payment on Term Loan

(24,427
)

(14,438
)

Repayment of bank line of credit

–

(1,073
)

Proceeds from officer advances

106,000

79,800

Repayment of officer advances

(98,800
)

–

Net cash provided/(used) by financing activities

(17,227
)

64,289

Increase/(decrease) in cash and cash equivalents

19,139

(60,195
)

Cash and cash equivalents at beginning of period

3,062

61,564

Cash and cash equivalents at end of period

$
22,201

$
1,369

Supplemental Disclosure of Cash Flow Information

Cash paid during the year for interest

$
10,374

$
63,278

Suppemental Schedule of Non-Cash investing and Financing Activities

Payments of line of credit through issuance of note payable

–

$
711,376

SOURCE: TX Holdings, Inc.

ReleaseID: 460852

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