AmeraMex International, Inc.

Marty Tullio - Board Secretary Lee Hamre - CEO Mike Maloney - COO Tracie Hannick - CFO

Thank you. Good morning, everyone.

Before we begin today's call, it is important that everyone understand that the statements made in today's conference call that relate to our future results, markets, growth plans or completion of the SEC audit are in fact forward-looking and involve certain risks and uncertainties associated with demand for the Company's products and services, and development for markets for the Company's products and services. Actual results, events and performance may differ materially.

Conference call participants are cautioned not to place undue reliance on these forward-looking statements, which speak only as the date of this conference call. AmeraMex undertakes no obligation to release publicly results or any revisions to these forward-looking statements that may be made to reflect events or circumstances after today’s call or to reflect the occurrence of unanticipated events.

Now, I would like to turn the call over to AmeraMex CEO, Lee Hamre. Good morning, Lee.

Good morning. Thank you, Marty.

Thanks for joining us this morning for our third quarter conference call. With me today are Mike Maloney, our Chief Operating Officer; Tracie Hannick, our CFO; and Marty Tullio, our Board Secretary.

I would like to thank you, our shareholders, for your ongoing support. Before the call is turned over to Tracie who will review the financials released earlier this week I would like to provide a brief update of our SEC audit.

During our last conference call, we discussed in detail where we stood with our audit and said that we would provide no update until the Form 10 was submitted to the SEC. AmeraMex has been working closely with its outside audit firm.

The audit firm has represented to AmeraMex the audited financial statements for the fiscal years ending December 31, 2017 and 2016 should be complete in early 2018. Once completed, the audits will be provided to the Company's outside legal team for a completion of the Form 10 and its submission to the SEC or review.

Tracy, would you please provide an overview of our financial statement for the quarter and the nine-month period that ended September 30?

Thanks, Lee. Good morning, everyone.

I'm happy to provide a brief overview of third quarter and nine months period ended September 30, 2017. As announced earlier this week, revenue for the quarter was approximately $1.6 million, a 22% increase when compared to revenue of $1.3 million reported for the third quarter of 2016.

Gross profit for the quarter was $641,000, a 17% increase compared to $548,000 for the third quarter of 2016. Net income for the quarter was 368,000 compared to a net loss of $152,000 for the 2016 quarter.

For the nine-month period ended September 30, 2017, AmeraMex reported revenue of approximately $4.3 million compared to revenue of $7.1 million for the comparable 2016 period. As discussed during our second quarter conference call, the first quarter of 2016 produced unprecedented revenue with a large shipment of equipment to a customer in Africa.

Historically, we experienced some revenue seasonality with a major portion of our revenue reported in the second half of the year. Net income for the nine month period was $117,000 compared to net income of approximately $1.2 million for the comparable 2016 period.

Our balance sheet for the third quarter ended September 30th indicates an approximately $300,000 increase in total assets and our total liabilities for the quarter increased approximately $800,000 due to expansion of the equipment rental pool. I would like to turn the call back to Lee at this point.

Okay, thank you. As we discussed on our last conference call, our strategy is to increase the equipment rental pool from $4 million to close to $10 million as we can by the end of 2018.

Our rental is a very large part of our business now especially after recession as lot of our customers that can't afford to buy equipment will want to rent, and we need to have the equipment available to rental them. Currently, our equipment out for rent at the end the third quarter represents approximately $7 million, a $1 million increase in the last 90 days.

Update on African opportunities and the core business in Africa, we're continuing to respond to request for proposals from companies in the continent of Africa. When we are awarded a funded project, we will make a public announcement.

We were able to announce our agreement with Oshkosh Defense to represent their comprehensive line of tactical vehicles to the Republic of Nigeria. We recently spent two days with Oshkosh management, and at the end of our trip, our territory was expanded to include Angola, one of the richest countries in Africa.

I need to revise -- core business wrap-up. Our pipeline for core business contains potential U.S.

business, U.S. government proposals and international proposals for Africa and Central America.

We are not currently seeing an increase in infrastructure projects. These projects can take approximately not one to two years from the time funding is approved to till the first bulldozers arrives on site.

It is the long process with permits and engineering, planning before anything really starts. We're seeing significant increases in orders from saw mills as our government has enforced and increased in import taxes on lumber entering the U.S.

We've also seen an increased demand for container handlers both empty and loaded from ports along the West Coast and from what we call dry ports located throughout the U.S. These dry ports support the 100s of distribution centers located across the U.S.

providing the tools to quickly unload, store and ready them for continued transportation of goods across the U.S. The number of distribution centers is increasing as online sales are growing and companies such as Amazon and Walmart are providing same day or next day deliveries.

Today, we are midway through the fourth quarter and have booked 2.5 million in equipment orders, a $1 million rent to purchase agreement and a five-year maintenance agreement with the U.S. government generating an average of 30,000 a month or $1.8 million over the next five years through the end of the contract.

We believe we can finish the quarter with another $0.50 or $0.75 million in orders. With that said, we would like to begin the question-and-answer session for today's call.

Operator we would like to begin Q&A.

Hi Lee, hi Marty, I have got a couple questions for you. I'll start with Lee.

So with AmeraMex's background and infrastructure I would think that you'd be in a good position to help out with the rebuild of Santa Rosa, they are talking about $1 billion in damage and 9,000 structures destroyed. So, have there been any thought Lee given towards that at all?

Any of you have been approached by anybody?

Sure, yes, one of my real good customers in San Francisco is in the business of transporting hazardous waste and hazardous materials to a landfill out in Utah. And what he does is, he gathers up hazardous waste from a site like Santa Rosa where the fire was, they containerized all the waste or this contaminated, those in the containers then they carry the containers to the rail site, and they dumped the containers into gondola cars and the train leaves about twice a week headed for Utah to unload all the cars into this landfill.

They have called and purchased one machine and rented two more to get started in Santa Rosa. They will probably end up buying the two they have on rent.

They also have container handlers they bought from us in the past. And I would anticipate they're going to double or triple their volumes monthly here within the next couple of weeks.

And that’s a directly related to Santa Rosa.

I would think the Menzi Mucks might be in a really good position to work in Santa Rosa too.

No not really, Menzi Muck is a machine designed work on steep side hills and do finish work, and also inaccessible work. It's possible after the first few phases are done, if they are going back in to rebuild power lines, and they have to get up to sites where the towers are, that are on steep ground that's where the Menzi Muck might come in.

Okay that's really good to know. I have got another question for you about the Walmart and Amazon.

Could you talk a little bit more about the Company's -- how the Company would be involved in that? Again I didn't completely understand what you were saying?

Okay, they are shipping a lot of stuff in from overseas in big volumes, out of China and Southeast Asia. And these containers come into ports and then they are distributed around the U.S.

by rail and by truck to what we call a dry port and a dry port is a big yard with machines that we sell the container handlers that stack the boxes up and then they will un-stack and put them on a local truck for delivery to the stores. Then that truck brings the empty box back to the dry port where we stack them up again.

And when the train comes through, we load the empty boxes on the train and the train takes them back to port. They go back on ship and they go back to get another load.

So our machines are handling these boxes at the port, at the rail sites, and at the dry port on the other end. And we don't have any direct contact with the stuff is being built or order sold by these companies, we are just the transportation side.

Well, that’s great, that kind of the unexpected at least to me side benefit from being in the cargo handling business.

Oh, absolutely. So, you still have the brick-and-mortar stores that are doing their best to compete, and we still handle a lot of containers that are ultimately going to brick-and-mortar stores.

I mean like Walmart they probably do well over half at their brick-and-mortar stores, but they are increasing on their online sales and guaranteed overnight deliveries rapidly. I wouldn’t not be surprised to see that larger than their brick-and-mortar sales in the next five years.

Yes, that's great. I've got a question for Marty.

Yes, Charles.

Yes, In the middle of September, the volume of the stock just sky rocketed otherwise there was days and there were about a week or 10 day period where it was doing over 30 million shares a day, [Indiscernible] have come out of nowhere and their price actually came close to $0.02. Do you have any idea of what happens to spur all of that interest in the stock?

We did have several firms that they had called Lee and they also call to us and talk with me about how the Company was doing. And we are very [low key] [ph] as to how we are doing and all of suddenly we start to see this buying, as I talked it was a market makers, it's very difficult to get a market maker to talk with you, Knight is one of the largest makers in the stock.

And since we're still a non-reporting, they really wouldn’t relay any messages or information back to me, so I couldn't tell exactly what's happening or who had the stock. But I can tell from the shareholders list that we pool almost monthly now that the people who had large positions in the company still have those large positions.

So it feels to me and Lee and I were talking about this just before the conference call that somehow there was some manipulation of the stock and it does happen I've seen it happen in several companies that have stock that trade between $0.01 and $0.05. See this manipulation, but I can’t pin point exactly where it will be easier when we are listed on the board and I have more access to the market makers, but I'm as baffled as you are.

It was nice to see that jump and it completely came out of nowhere. And I don’t know a lot about all of this, but I have a feeling that once we get out of the pink sheets, it will be a lot more civilized and a lot of the bigger firms and corporations would be much more interested in buying the stock at that point when it becomes a serious entity.

You are correct Charles. I totally agree with you.

Do you have any idea roughly what the audit costs totaled?

The audit isn’t complete but I think Tracie and Lee can best address that. Tracie works directly with the auditors and knows the cost I believe or approximate.

I don’t think we have it right down nailed to the 0.01 because we are not finished yet. Tracie, could you handle that please?

I can. This is approximate because like Marty said, we're not done yet.

But right now, we are over $80,000 for 2014, '15 and how far we are into '16.

Well, I'll have to say how serious the company is about really moving forward and it's a lot of money, but I know on the long run it's going to pay-off for all of us especially those of us that have been around for 10 years or so and consistently buying stock. So well, thank you so much for the honest answers and everything, and I will look forward to hearing any other questions that might be coming in.

I was just curious though a little bit more about beyond the audit, once the audit is completed, what are your plans on up-listing and to what level I guess are your plans?

Would you guys like me to take that?

Yes, go ahead Marty.

Okay, what we will do is once we have the audit is approved by the SEC, we have to trade at -- stock has to trade at $0.01 for 30 days and then we uplift to the OTC market. And there is OTC QB, QX and we would look at the QX first.

We can't lift up to another market until our stock is trading at I believe its $3.50 or $4 per share. So just being on the bulletin board and off the pink sheet gives us a wider range of exposure to a wider range of investors.

And because we will be fully reporting then the blue sky rules that come along with the listing to the OTC that allows people to - brokerages to solicit to their clients with talking about AmeraMex and it makes it easier for us to have road shows and to participate in conferences.

Thank you and then one another question. As far as the OshKosh goes, what -- I know that you have limit on what you can say, but what have you done thus far in meeting with OshKosh?

And I think I was in the impression that you are marketing or providing some demo just bringing clients and having performing something as far as showing the machines and then talking with clients down in Africa. What has gone on and where do you stand at this point with OshKosh?

Right now, what we're at this -- I can pretty much answer this completely for you where Nigeria is the first country that we were given to represent the OshKosh group. And we started with that going through our good contracts -- our contact there, who is an assistant to the President.

He is one of the higher positions in the government there and he took our plan to the President. We are awaiting his response right now.

It's been a few weeks and they haven't really given us an accurate list, but I believe there should be three people possibly only two that will come to Wisconsin to tour the factory with us. One little burp that came up is that the government has talked with the U.S.

government regarding military vehicles and defense vehicles, and somebody in the U.S. government has told them that we would give them vehicles, which has kind of cool them down from come in to buy vehicles.

And I think when we get over that hurdle that things will get moving quicker, but we are just waiting for the list the names to do a formal invitation and then we bring them over and take them through the factory. And I toured the factory just couple months ago with my salesman that covers Nigeria.

And after the tours in a meeting, they also agreed that we can handle Angola for them. I've been to Angola several times.

I'm working on two or three projects there, one in particular that we should be able to announce in another month or two, right now we still can't. But on my next trip which will be right after the first of the year to Angola.

I'll be taken all the information with me on OshKosh to present it to the Ministry of Defense for Angola. Angola has a very large army and consumes a lot of vehicle like this.

OshKosh is the best-known on the planet and they build the best quality trucks. And we are competing with the Chinese and that's basically it.

So, we have a real good opportunity to develop something although it takes longer, considerably longer, to deal with a high level of the government in any countries, as compared to dealing with their contractors then raise and start a project moving dirt. I know how to do that real well.

We get right to the point, but there's a lot of beating around the bush with these government guys. On top of that Nigeria and Angola both had recent elections and all of the government officials changed.

So, we had gotten a lot farther along and then they have an election and we are basically starting over. So it's tough, but I think we are getting somewhere.

I really do. And I think that we will be able to make some good announcements regarding OshKosh in the first quarter as well as some project announcement in the first quarter I am anticipating.

Okay, great. Yes, just it's been awhile since we've heard a whole a lot about Oshkosh, so I was just more so just curious to see where you stood with that.

So well thank you. Appreciate it.

Thanks Tyler.

Just real quick. Just curious listening in, trying to understand it seems that the goal post for the audit continually move and just trying to understand why that is?

Also it was noted that you guys expect to complete '16 and '17 in January. So I was trying to understand what happened to '14 and '15, if you can explain that real quick that would be great?

Tracie?

Yes, we have been working with -- for 2016, we are working with a different audit company and that caused some delays, and we are wrapping that up at the first week of December we hope, and getting that complete and starting on 2017. So that we can get both of those numbers -- both of those audits done in the first part of the year.

We do -- with the delays from the auditors we ran into '16 numbers just being stale to present the Form 10. So that's why we're getting them both done at the beginning of the year.

'14 and '15 are fully audited, we don’t expect any problems with those, but we have to move in to like getting '17 done ASAP.

Okay, all right, so '14 and '15 were audited.

They are audited. They are complete good to go.

It was the same problem back -- when we did '14 and '15 and the same thing happened and it took too long, and we got to where are the numbers were sale so we had to do '15 and use '14 and '15 to submit it to the lawyer. Again the auditors got behind and we didn’t meet our deadlines so then we were going to '15 and '16.

Now, the newer auditors that we've been with them about a year says that they are going to have 17 is going to get the strong attention, and we should be able to get it done. I think Tracie will agree in the first quarter or thereabouts of '18 which is plenty of time to meet all the deadlines and submit everything to the SEC with the Form 10.

And that's a reason why it hadn’t been submitted as we got to the point where the numbers were stale in the eyes of the SEC.

Lee would you like to…

Yes, I've got some closing remarks here you sent it to me. We would like to thank all of you for participating today in the call and for your questions and continued support.

We look forward to speaking with you when the year-end results are disseminated.