22nd Century Group Inc (XXII)

[KraFtaVerK]

During the three months ended June 30, 2015, cost of goods sold were $2,600,446 or 112.7% of net sales revenue. As indicated above in the discussion of revenue, we were not operating the factory at full production capacity during the second quarter of 2015. As a result, the cost of goods sold, which includes the cost of raw material components, direct manufacturing costs and an overhead allocation, was in excess of net sales revenue.

During the three months ended June 30, 2014, cost of goods sold were $13,176 or 81.8% of revenue. The cost of goods sold related to the manufacture of only filtered cigars and included the cost of materials, labor and allocated overhead.


Is it me, or is it weird that the relative cost is lower when there's very limited production in comparison with higher production... makes no sense? Could anyone ask tomorrow?