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Statement of Income & Expenses For Quarter Ending July 31, 2005 [ REVISED TO EXCLUDE INCOME & EXPENSES NOT RELATED TO CORE LUMEN FOODS' BUSINESS: Read Introductory "NOTE" with Comments Below ]  NOTE --->> This revised
P & L is derived from Herbologics' singular set of
financial records, used both internal management and
tax purposes for the quarter and year ending
July 31, 2005. What you see below is identical to
the original P & L for this
period, except that income unrelated to the Lumen Foods
core business has been removed as well as unrelated and
discretionary expenses that a new owner would not
encounter. To help identify what changes have been
made, revisions are made in red,
such that the original figures are still there;
however, they are not numerically included in
subsequent subtotals and totals that follow.Additionally, notes
are added wherever these revisions appear --
also marked in red, so
that management's reason for the line item exclusion
is given.Finally, this page provides
a Revised Financial Summary to help put these
revisions into perspective from a "realizable profit" point
of view. |
REVENUES Current Current Y-T-D Y-T-D Prior
(QTR + Y-T-D) Amount Percent Amount Percent Yr %
---------------------- ----------------------------------------------------
TOTAL NET SALES 209,651.95 100.00 743,705.93 100.00 100.00
COST OF SALES 29,480.69 14.06 185,914.03 25.00 30.56
----------------------------------------------------
GROSS PROFIT 180,171.26 85.94 557,791.90 75.00 69.44
OPERATING EXPENSES
-----------------------
Administrative Salaries 4,635.02 2.21 18,895.29 2.54
Salaries & Wages 13,765.05 6.57 81,244.45 10.92 15.25
Employee Benefits 490.60 0.23 1,441.22 0.19 0.19
Advertising: Dist. 840.10 0.40 2,319.14 0.31 0.11
Advertising: Mail Order 150.00 0.02
Advertising: WWW 0.91
We discuss
our reason for excluding Advertising not directly
to the core Lumen Foods business
on the Revised 7/31/04 P & L
page.
Accounting 135.00 0.06 174.50 0.02 0.59 Auto Repairs 862.05 0.12 Bad Debts 1.73 Bank Service Charges 153.25 0.07 902.79 0.12 0.17 Bank / Credit Card Charges 345.00 0.05 0.16 Books & Publications 244.39 0.12 244.39 0.03 0.24
We have always been engaged in extensive research and have used
Lumen Foods to fund our extracurricular spinoffs. Thus, books,
publications, lab fees & supplies, and research expenses
(see below) are all discretionary
and expendable for whoever purchases Lumen Foods. These
expenses are completely non-essential.
Commissions: P/L & Inside 2,791.71 1.50 10,403.73 1.28 0.36 Commissions: Brokerages 9,017.86 1.11 1.62 Delivery 26.57 0.01 1,720.42 0.21 0.42 Dues/Subscript'ns 146.25- 0.07- 98.25- 0.01- 0.07
Self-explanatory why we don't include it. Because of credits granted,
it carries negative values here.
Depreciation 1.34 Entertainment/Social 189.26 0.09 2,340.24 0.31 0.70 Equipment / Vehicle Rental 2,596.52 1.24 18,158.95 2.44 2.77
We covered our explanation for these on the
Revised 7/31/04 books.
For the most part, self-explanatory. Equipment / Vehicle
Rental is almost entirely for vehicle use unrelated
to the Lumen Foods' core business.
FDA / Kosher & Other Cert 1,500.00 0.72 8,165.00 1.10 1.79 Freight: Common Carrier 5,260.55 2.51 22,237.80 2.99 2.98 Freight: UPS 15,912.78 7.59 60,254.45 8.10 6.58 Freight: Foreign 0.01 Gas, Oil & Tires 761.92 0.36 2,672.68 0.36 0.30 Groundskeeping 600.00 0.29 1,720.00 0.23 0.23
The "Gas, Oil & Tires" relates to Vehicles (above), so it's discretionary.
The "Groundskeeping" is discretionary because it not only relates to
maintaining the front of Lumen Foods, but our other real estate
holdings, which are unoccupied.Insurance 2,295.17 1.09 15,523.27 2.09 2.24 Interest 12,848.07 6.13 14,600.49 1.96 3.15
The new owner is going to have his own "cost of money" and
"opportunity cost" to factor in separately. Our "interest relates"
during this accounting period and what follows after it going through
2006 is derived primarily from two sources: (1) the loan on the
"Wilshire Property," where Lumen Foods now operates, and (2) a loan
on the owner's personal home, wherein the proceeds to that loan
were used for the business. However, neither of these should be
considered expenses related to running the core business. All
costs of monies should be removed here, and then the new owner
should factor in his or her own cost of money, including both
the purchase price and additional funds to build the business
(which will obviously begin with building up their own accounts
receivable, since no A/R is transferred with this sale).Janitorial / Office Upkeep 7,271.01 0.98 0.85
We're keeping "Janitorial / Office Upkeep" in the color Black
and including it, but are simply going to make comment:
we believe simple office upkeep, regardless of where posted,
will run similarly for any new management.Lab Fees & Supplies 194.77- 0.03- 2.94
We got a credit back for lab fees and are factoring this
in our revisions. Compare to the hefty figures from
last year.Language Services 85.00 0.01 Legal 7,811.18 3.73 43,255.74 5.82 24.18
Still, the majority of these funds related to defending Alpha Omega
Labs and Greg Caton. Legal expenses related to running a
mature food company, such as Lumen Foods, have been historical
low and SHOULD be low for any new owner. Since we suspect
that any prospect that would buy Lumen Foods has a handle on
their OWN regular, customary, legal expenses, we will leave
it for a new owner to factor back what they feel, from their
own experience, what their normal legal costs, if any, would
amount to. Compare these figures to the even heftier
Legal Expense figures
for 2004.Maintenance, Building 84.00 0.04 3,022.44 0.41 1.92
This involves the maintaining of buildings which are not
transferred with the sale, and are tied to the removal
of rental income (below) which also do not come with
the sale. Lumen Foods' rental operations, it should
be noted, are losing money and have been historically
subsidized by the Lumen Foods core business: the very
business that is currently for sale.Medical Exp (for Accidents) 938.71 0.13 0.15 Miscellaneous 5,199.48 0.70 0.06 Office / Computer Services 321.25 0.15 1,808.68 0.24 0.01 Office / Computer Supplies 618.82 0.30 3,665.72 0.49 0.80 Outside Services: General 4,628.16 2.21 17,052.49 2.29 4.85 Outside Services: Web Site 4,095.50 1.95 8,322.16 1.12 0.85
Again -- "Outside Services" was a catch-all term we used to cover non-essential
services. It doesn't simply mean a contracted outside service:
as more purposefully contracted "outside services" can readily
be seen posted to other parts of the P & L: building maintenance,
groundkeeping, repairs (which covered ALL equipment and production-related
repairs by outsiders), language services (when we needed translation
work done), sales commissions (to brokers), legal, accounting, etc.
These two areas are non-essential by design: these ledger accounts
were created for this purpose, so we're taking them out.Payroll Taxes 6,177.49 2.95 27,103.02 3.64 4.12 Postage 963.63 0.46 3,437.99 0.46 0.40 Pest Control 300.00 0.14 1,550.00 0.21 0.24 Printing & Graphics 2,262.75 1.08 6,390.04 0.86 0.52 Promotional: Internet 0.02 Promotional: Gen / Other 78.33 0.01 0.13 Repairs: Lumen division 913.54 0.44 14,677.71 1.97 1.80 Research Expense 3,731.46 1.78 13,174.23 1.77 0.06
Total non-discretionary and unrelated to the core operation.
Research has almost always meant expenses related to fishing
for new entrepreneurial avenues. In this accounting period,
"research expenses" have been related to the building of
www.meditopia.org.Safety 0.12 Security 885.25 0.42 3,930.80 0.53 0.51 Shop Supplies 567.20 0.27 5,082.40 0.68 2.75 Taxes & Licenses 2,902.78 1.38 2,902.78 0.39 Taxes: Ad Valorem 3,894.85 1.86 3,894.85 0.52 0.48 Taxes: Property Taxes 1.03
We are including "ad valorem" sales, because a new buyer will incur
these costs if he or she stays in Lake Charles, and may well have
an equivalent form of municipal taxation in whatever target location
the business would be in. Concerning "Travel" below, we must assume
that the new owner will have similar expenses related to running
the business their way, and since "Web Site Development" is and
was always nominal (we did our own web work internally), we will
keep it in as well.
Travel 1,484.89 0.20 0.53
Telecom: Basic / LDS 2,390.04 1.14 9,894.71 1.33 1.79
Telecom: Internet 248.76 0.12 1,077.96 0.14 0.23
Telecom: Sprint / Cell 763.76 0.36 4,185.92 0.56 0.48
Tenant Expenses, Misc. 276.72 0.13 1,106.86 0.15 0.20
Utilities 6,410.92 3.06 24,759.47 3.33 4.15
Waste Disposal 767.63 0.37 3,238.55 0.44 0.90
Web Site Development 0.08
Worker's Compensation 222.31 0.11 3,116.00 0.42 0.77
---------- ----- ---------- ----- ------
OPERATING EXPENSES 119,037.21 56.78 494,076.64 66.43 102.03
OPERATING PROFIT 61,134.05 29.13 63,715.26 8.57 32.59-
========= =========
OTHER INCOME
Gulf Coast Payments 3,583.96 1.71 3,583.96 0.48
Le Panier Income 2,127.06 1.01 2,127.06 0.29 49.08
Damage Claims Paid 0.14
Rental Income 1,850.00 0.88 1,850.00 0.25
---------- ----- ---------- ----- ------
TOTAL OTHER INCOME 7,561.02 3.61 7,561.02 1.02 49.22
OTHER EXPENSE
Loss: Guth Renov/Inven 8.99
Loss: Forfeiture 222,140.38 105.96 222,140.38 29.87
---------- ------ ---------- -----
TOTAL OTHER EXPENSE 222,140.38 105.96 222,140.38 29.87 8.99
NET PROFIT (or Loss) 153,445.31- 73.19- 150,864.10- 20.29- 7.76
========== ==========
As with
the 2004 books we are redding
out the entire "Other Income" and "Other Expense" section here, because,
by their very nature, they involve activities that are unrelated to
the core business. In this year, you will note that a $222,140.38 loss
was taken relating to the loss of property connected with Alpha Omega
Labs -- an issue we cover in the
Executive Summary's
Legal Section.
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