Results of Operations
For the nine month period ended May 31, 2011, loss from operations totaled ($25,510) on gross sales of $418,879, less costs of goods sold totaling $246,888 resulting in gross profits of $171,991, as compared to a loss from operations of $47,291 on gross sales of $253,363, less costs of goods sold totaling $216,073, resulting in gross profit $ 37,290 in the nine month period ending May 31, 2010. Sales increased during the periods based on the fact that the Company is becoming further recognized in the industry and the fact that the market for advertising is shifting to a digital format making the Company’s services more desirable and in demand. Margin profit increased due to the Company’s costs related to renegotiating or acquiring new customers as the Company did not have the same promotional and startup costs. While costs of operations increased in the current period were attributable almost entirely to an increase in professional fees from $2,395 in 2010 to $38,390 in 2011, and an increase in investor relations from $nil in 2010 to $48,000 in 2011, both due to costs at the parent company level associated with the acquisition of the Fresh subsidiary. Gross profits were $37,290 for the nine months in 2010, compared to $171,991, as a result of increased sales of $165,516 with increased margin profit from 14% (2010) to 41% (2011).
The Company’s gross sales for the three month period ending May 31, 2011 increased by 148% over the reported gross sales for May 31, 2010. This increase in sales resulted in gross profits of $76,649 representing more than 10 times the gross profits of $5,704 reported for the three month period ended May 31, 2010.
The Company had net income of $15,696 for the three months ended May 31, 2011 as compared to a loss of ($23,246) for the comparable three month period ended May 31, 2010. The Company’s net loss for the current nine month period was ($111,665), as compared to ($47,291) in the 2010 period, which increase was due almost entirely to a non-cash loss incurred on a related party debt settlement, and the increased losses from operations as a result of the increased operating expenses at the parent company level. The Company notes that the Company’s losses for the nine month period, relate to fees as represented by the costs of being public