Revenue
Our adjusted revenue from continuing operations for the year ended April 30, 2018 was $7,078,680 compared to $3,717,188, an increase of $3,361,492 or approximately 90.4%, from the year ended April 30, 2017.
Revenues consists of $3,673,218 in construction, $2,041,616 in retail sales, and $1,363,846 in technology and media sales.
Cost of Goods Sold
Our cost of goods sold for the year ended April 30, 2018 was $4,150,440 compared to $2,881,043 for the year ended April 30, 2017. The cost of goods consisted of $2,732,011 in construction cost, $1,252,142 in resale products, $59,844 in commissions, and $106,443 in other fees that include merchant fees and shipping. The increase in cost of goods is proportional to the growth in revenue.
Gross Profit
Our adjusted gross profit for the year ended April 30, 2018 was $2,928,240 compared to $863,145 for the year ended April 30, 2017. The gross profit of $2,928,240 for the year ended April 30, 2018 represents approximately 41.7% as a percentage of total revenue. The gross profit of $863,145 for the year ended April 30, 2017 represents approximately 23.2% as a percentage of total revenue. This increase in the gross profit is primarily attributed to increase in sales, offset by the higher cost of goods and services.
Operating Expenses
Our adjusted operating expenses increased by $1,149,052 to $1,952,512 for the year ended April 30, 2018, from $803,460 for the year ended April 30, 2017.
The increase was primarily due to the increases in professional fees of $857,515, selling, general and administrative expenses of $198,253, consulting fees of $907,424, and bad debts of $572,257, with decreases in marketing and advertising of $57,424, and research and development of $8,918.
Our total operating expenses for the year ended April 30, 2018 of $1,952,512 consisted of $320,577 of selling, general and administrative expenses, $921,377 in professional fees, $1,372,965 in consulting fees, $78,804 in marketing and advertising, $6,612 in research and development, and $572,257 in bad debts.
Our general and administrative expenses consist of bank charges, telephone expenses, meals and entertainments, computer and internet expenses, postage and delivery, travel, rent, office supplies and other expenses.
Net Income
Our adjusted net income increased by $1,071,116 to $1,103,801 for the year ended April 30, 2018 from $32,685 for the year ending April 30, 2017. The increase in net income compared to the prior year is a result of the increase in gross profit of $2,092,095 and the increase in operating expenses of $1,149,052.
Off-Balance Sheet Arrangements
As of April 30, 2017, the Company owned 230,000,000 of VitaCig, Inc., with a value of $2,300,000. Subsequently to the end of the fiscal year, the Company has reduced its ownership in VitaCig, Inc., by 172,500,000 common shares to 57,500,000 as part of its acquisition of the VitaCig business.
Going Concern
Our financial statements are prepared using generally accepted accounting principles, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. Because the business is relatively new and has a short history and relatively few sales, no certainty of continuation can be stated. The accompanying consolidated financial statements for the years ended April 30, 2018 and 2017 have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company and therefore, we are not required to provide information required by this Item of Form 10-K.
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