PE pennies

[dijeetyet]

GHNA
.68 X 2.00
Results of Operations


Product Sales: We generated revenue of $6,450,538 for the three months ended March 31, 2010, an increase of 6,450,538 or 100% compared to $0 for the three months ended March 31, 2009. For the three months ended March 31, 2010, we assumed the position of primary obligor and recognized revenue on a gross amount billed to the customers when the persuasive evidence of an arrangement exist, the products are delivered, the fee is fixed and determined and the collection of the resulting receivable is probable. We anticipate this business to increase as we expand into the market. On the other hand, we recorded revenue on a net basis and classified as product net sales for the three months ended March 31, 2009.

Product net sales: We generated revenue of $0 for the three months ended March 31, 2010, a decrease of $1,108,262 or 100% compared to $1,108,262 for the three months ended March 31, 2009. For the three months ended March 31, 2009, we recorded the revenue net of procurement costs paid to the suppliers for the agricultural trading as these revenues were recognized on a net basis in accordance with ASC Topic 605-45-45, “Overall Consideration of Reporting Revenue Gross As A Principal Versus Net As An Agent” because we performed as an agent without assuming the risk and rewards of ownership of the distribution and sale of agricultural products. All costs associated with the delivery of product are not borne by us. On the other hand, we recorded revenue on a gross basis as we assumed the position of primary obligor and classified as product sales.

Catering service and restaurant sales: We generated revenue of $1,411,535 for the three months ended March 31, 2010, an increase of $1,201,039 or 571% compared to $210,496 for the three months ended March 31, 2009. The increase in revenue is because during 2008 and part of 2009, we had reduced the catering business due to the economic down turn. We have begun increasing the catering service and restraint sales and would expect the revenues to increase slightly each quarter as we enter into new cities.



Costs of Product sales: The cost of sales for Product sales as a percentage of revenue was 79.9% for the three months ended March 31, 2010 compared to 3% for the three months ended March 31, 2009. The increase is primarily attributable to the recognition of revenue in which we recognized in a gross basis for the three months ended March 31, 2010.