Pretty much identical to the 10-Q in May.
The plant in Taiwan appears to be a lost cause to the company. It appears to be producing at a huge loss to the company. Apparently the configuration was not built to house racks vertically. It looks like they are laying off employees instead of hiring more. Never a good sign. Hopefully they do better out of China.
From the report it states:
Net Revenues and Cost of Sales
Net revenues for the three months ended June 30, 2014 increased by $72,440 to $112,597 compared to $40,157 for the same period in 2013. The increase in net revenues was primarily due to the increase in sales volume related to the sale of vegetables to small and medium sized supermarkets in Taiwan. Cost of sales for the three months ended June 30, 2014 totaled $512,155 or approximately 454.86% of net sales. Gross profit as a percentage of net sales was -354.86% for the three month ended June 30, 2014. The construction of our factory with agricultural equipment used to grow vegetables was complete in the fourth quarter of 2013. However, the factory operated with limited capacity producing vegetables, resulting in sales revenue that negligibly exceeded fixed costs of operation incurred during the period.
Operating Expenses
Operating expenses for the three months ended June 30, 2014 totaled $198,225 compared to $743,816 for the three months ended June 30, 2013, a decrease of $545,591. The decrease in operating expenses was primarily due to hiring fewer administrative employees during the second quarter of 2014 compared to the same period last year. In addition, some expenses, such as utility cost, were reclassified under cost of sales for the second quarter of 2014 compared to operating expenses for the same period last year.
Loss from Operations
Loss from operations for the three months ended June 30, 2014 totaled $597,783 or approximately (530.90)% of net sales compared to a loss of $1,156,388 for the three months ended June 30, 2013, a decrease of $558,605. The decrease in loss from operations was primarily due to increased cost of sales, which was partially offset by the decrease in operating expense and the increase in net sales.
