10-Q: Ameritek Ventures Reports Net Income for Q1 2024, Despite Revenue Dip

Sentiment:

Quarterly Report 15 May 2024 2:39 PM

Ameritek Ventures, Inc. reports a net income of $19,697 for the first quarter of 2024, despite a slight decrease in operating revenue compared to the same period in 2023.

Capital raiseManagement plans to raise equity capital to finance the operating and capital requirements of the Company.Amounts raised will be used to further development of the Company's products, to provide financing for marketing and promotion, to secure additional property and equipment, and for other working capital purposes.

Worse than expectedThe company's operating revenue decreased by 11% compared to the same period in 2023.

Summary

Ameritek Ventures, Inc. reported a net income of $19,697 for the three months ended March 31, 2024, compared to a net loss of $6,757 for the same period in 2023.
Operating revenue decreased by 11% to $215,922 for the first quarter of 2024 from $242,320 in the first quarter of 2023.
Total operating expenses decreased by 27% to $153,566 for the first quarter of 2024.
The company's cash balance was $2,245 as of March 31, 2024, compared to $5,618 as of December 31, 2023.
The company relies on borrowings to finance its working capital needs.
The company has several outstanding loans with related parties, including Epazz, Inc.
The company is involved in legal proceedings, including a lawsuit filed by Meridian Pacific Holdings, LLC and a lawsuit filed by the company against Clinton L. Stokes, III.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While the company achieved net income, revenue decreased and it relies on borrowing. The related party transactions and legal proceedings add further uncertainty.

Positives

The company achieved a net income of $19,697 for Q1 2024, compared to a net loss of $6,757 for the same period in 2023.
Total operating expenses decreased by 27% to $153,566 for the first quarter of 2024.
Net operating income before other income was $62,356 for the first quarter of 2024, as compared to a net income of $31,769 for 2023, a positive net change of $62,746.

Negatives

Operating revenue decreased by 11%, falling from $242,320 in Q1 2023 to $215,922 in Q1 2024.
The company's cash balance decreased to $2,245 as of March 31, 2024.
The company relies on borrowings to finance its working capital needs.

Risks

The company relies on borrowings to finance its working capital needs.
The company has several outstanding loans with related parties, including Epazz, Inc.
The company is involved in legal proceedings, including a lawsuit filed by Meridian Pacific Holdings, LLC and a lawsuit filed by the company against Clinton L. Stokes, III.
The company's disclosure controls and procedures were not effective as of September 30, 2022 to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure due to the material weaknesses described below.

Future Outlook

Management plans to raise equity capital to finance the operating and capital requirements of the Company; amounts raised will be used to further development of the Company's products, to provide financing for marketing and promotion, to secure additional property and equipment, and for other working capital purposes.

Management Comments

The Company operational activity settled into normal activity levels.
Total operating expenses decreased as the Company is now using the proprietary server from Epazz, Inc. and not loaning cloud space from third party vendors.

Industry Context

The company operates in the software and hardware products and services industry, with a focus on warehouse solutions, medical technology, blockchain technology, augmented reality, and vertical landing aircraft services.

Comparison to Industry Standards

It is difficult to compare Ameritek Ventures directly to industry standards due to its diverse range of business activities.
Companies like Interactive Systems and interlinkONE, which provide warehouse solutions, could be compared to larger supply chain management software providers.
However, Ameritek's involvement in medical technology, blockchain, and augmented reality makes a direct comparison challenging without more specific financial details for each segment.
The company's reliance on related party transactions and debt financing also deviates from typical industry practices for established companies.

Legal Proceedings

Meridian Pacific Holdings, LLC filed a lawsuit against certain directors, officers, affiliates, and the Company for breach of contract and fraud.
The judge in this case dismissed all claims against Ameritek Ventures, Inc. on October 19, 2023.
The Company filed a lawsuit in the Clark County, Nevada, court against Clinton L. Stokes, III, the former owner of the Company, to settle the matter of shares ownership and that of if the asset coming from Fiber Optic Assets was purchased free and clear of any encumberment from Meridian Financial Group, LLC.

Related Party Transactions

The company has several outstanding loans with related parties, including Epazz, Inc.
Ameritek entered into a management agreement with Epazz, Inc., a related party, with a minimum annual fee of $350,000.
On October 2, 2023 Ameritek issued 7,700,000 shares of Preferred Stock, Series C to Star Financial Corporation, a related party, for debt issuance fees consistent with the terms of the agreement.
The President of Star Financial Corporation is Fay Passley, Shaun Passleys mother.

Stakeholder Impact

Shareholders: The net income may be viewed positively, but the reliance on debt and related party transactions could raise concerns.
Employees: The company's ability to continue operations and invest in product development depends on securing financing.
Customers: The company's ability to deliver products and services may be affected by its financial condition.
Creditors: The company's ability to repay its debts depends on its financial performance and ability to raise capital.

Key Dates

Date	Description
2010-12-27	Company organized as ATVROCKN under the laws of the State of Nevada.
2017-06-20	Company changed its corporate name to Ameritek Ventures, Inc.
2020-11-10	The Company merged with VW Win Century, Inc. (previously registered as FlexFridge, Inc., an Illinois Corporation).
2020-11-12	Ameritek entered into a management agreement with Epazz, Inc., a related party, with a minimum annual fee of $350,000.
2020-11-13	Ameritek merged with Bozki, Inc.
2021-05-13	Ameritek issued $185,000 non-convertible promissory note to Cloud Builder, Inc.
2021-05-14	Ecker Capital, LLC, a subsidiary of the Company, purchased the outstanding stock of Interactive Systems, Inc.
2021-05-15	The Company assumed a loan from the Reading Coop for $27,957 with the acquisition of interlinkOne.
2021-08-05	The Companys management and that of Cloud Builder, Inc. decided it was in their best interest to convert the note.
2021-09-09	Ameritek issued 30,000,000 shares to Cloud Builder, Inc. in consideration for $166,330.
2021-09-15	Ameritek and Epazz agreed to convert $500,000 of debt into Ameritek common stock and a nine-year note with principal of $572,410 and 8% annual interest.
2021-10-01	Ecker Capital, LLC, a subsidiary of the Company, purchased the outstanding stock of interlinkONE, Inc.
2021-10-31	The Company received a $500,000 SBA loan for 30 years with a 3.75% interest.
2022-11-30	Ameritek has a loan with SBFC LLC, DBA Rapid advance with variable interest rate originating.
2023-03-06	The Company filed a lawsuit in the Clark County, Nevada, court against Clinton L. Stokes, III.
2023-10-01	There was a dispute between the lender and the Company, which was settled and this note was reinstated.
2023-10-02	Ameritek issued 20,000,000 shares of Common Stock for debt conversion to common stock, consistent with the terms of the agreement.
2023-10-19	The judge in this case dismissed all claims against Ameritek Ventures, Inc.
2023-10-26	Ameritek issued 20,000,000 shares of Common Stock for debt conversion to common stock, consistent with the terms of the agreement.
2024-03-14	The Company and Cloud Builder, Inc. agreed to convert $32,480 of this debt into 29,000,000 class A common stock.
2024-03-31	End of the quarterly period.
2024-05-06	Meridian Pacific Holdings, LLC filed a lawsuit against certain directors, officers, affiliates, and the Company for breach of contract and fraud.
2024-05-14	Date of the report.
2024-05-15	Date of certifications.

Keywords

Ameritek Ventures, Financial Results, Q1 2024, Net Income, Operating Revenue, Loans, Related Parties, Legal Proceedings

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