Results of Operations for the year ended December 31, 2013 compared to the year ended December 31, 2012:
Total revenues generated for the year ended December 31, 2013 totaled $2,125,851 an increase of 285% from the year ended December 31, 2012 which totaled $552,579. The increase was primarily due to the company’s acquisition of Edible Garden Corp in April 2013 and the continued sales expansion of the Company’s produce line. At this stage in the Company’s development, revenues are not yet sufficient to cover ongoing operating expenses. Gross profits for the year ended December 31, 2013 amounted to $88,918 for a 4% gross margin. Gross profits decreased $11,948 or 12% for the year ended December 31, 2013 compared to $100,866 for the year ended December 31, 2012 with an 18% gross profit margin in 2012. The decrease in gross profits and gross margin is a result of higher revenue from the sale of locally grown hydroponic produce.
Selling, general and administrative expenses of $3,575,898, which included $1,355,990 in non-cash outlays in the form of restricted stock and warrants issued as part of the units to raise capital, the Company realized an operating loss of $3,486,980. Operating losses for 2013 of $3,486,980 were down $2,284,985 or 40% as compared to the 2012 operating loss of $5,771,965. The overall decrease of $4,799,965 was due to the impairment of goodwill in 2012. The balance was offset by approximately $1,220,590 from the increase in warrants issued due to the capital raises in 2013. Consulting expenses increased $738,902 due to more consultants being hired in 2013 in association with the new locally grown hydroponic produce business. In 2013 there was a write-off of obsolete inventory in the amount of $417,667 versus zero in 2012. Professional fees increased $90,192 in 2013 versus 2012 due to the additional filings made to register the Company’s common stock.
