RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Results of Operations for the Year Ended December 31, 2019, compared to the Year Ended December 31, 2018





Sales Revenue

Sales revenue for the year ended December 31, 2019, was $5,592,820, compared to $462,422 for the year ended December 31, 2019, an increase of $5,130,398 or 1109.5%. During 2019, the Company increased its sales staff. Our sales agents have been very successful with their sales efforts due to the expansion of their sales channels during 2019.





Cost of Goods Sold

Cost of goods sold for the year ended December 31, 2019, was $2,271,707, compared to $253,418 for the year ended December 31, 2018, an increase of $2,018,289 or 796.4%. The increase in cost of goods is directly related to the increase in sales. Specifically, for the cost of 3L blending oil and the Acer truncatum Gel Candy.





Operating Expenses

Professional fees were $88,610 for the year ended December 31, 2019, compared to $61,020 for the year ended December 31, 2018, an increase of $27,590, or 45.2%. Professional fees consist mostly of legal and audit expense. The decrease is the result of increased audit and legal expense.

Consulting expense was $172,758 for the year ended December 31, 2019, compared to $112,186 for the year ended December 31, 2018, an increase of $60,572 or 54%. Consulting expense has increased due to decreased use of consulting for business management and intellectual property.

Selling, general and administrative expense was $2,792,629 for the year ended December 31, 2019, compared to $750,808 for the year ended December 31, 2018, an increase of $2,041,821 or 271.9%. The increase is the result of the overall increase operations including salaries and wages, rent, freight and marketing expense.





Net Income (Loss)

Net income for the year ended December 31, 2019, was $292,507, compared to a net loss $715,894for the year ended December 31, 2018. The increase from the net loss to net income is the direct result of the increase in sales.

Liquidity and Capital Resources

During the year ended December 31, 2019, $482,500 was provided by operating activities compared to $796,194 used for operating activities in the prior year.

During the year ended December 31, 2019, we used $17,609 for investing activities for the purchase of property, equipment and software compared to $1,963 in the prior year.



  40

During the year ended December 31, 2019, we repaid $481,543 of related party loans and received $86,289 from other loans for net cash used by financing activities of $395,254. For the year ended December 31, 2018, we received $93,312 from the sale of common stock, $476,507 from loans and $179,591 from loans from related parties, for total cash received of $749,410

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Contractual Obligations

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

© Edgar Online, source Glimpses