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Result of Operations
Three Months Ended September 30, 2008 Compared with Three Months Ended September 30, 2007
The Company’s net sales increased to $5,715,048 for the three month period ended September 30, 2008 from $0 for the three month period ended September 30, 2007, an increase of $5,715,048.
The increase in sales was the result of the acquisition of WiseBuys, Hackett’s and North Country Hospitality which took place on October 23, 2007, November 7, 2007 and June 1, 2008, respectively.
The Company’s cost of goods sold also increased from $0 for the three months ended September 30, 2007 to
$3,580,699 during the same period in 2008.
This led to a $2,134,349 increase in our gross margin to $2,134,349 for the three month period ended September 30, 2008 from $0 for the three month period ended September 30, 2007.
Net realized and unrealized loss on the sale of securities was $154 during the three month period ended September 30, 2008 versus $0 for the same period ended September 30, 2007, an increase of $154.
Our general and administrative expenses during the three months ended September 30, 2008 were $3,623,187 versus $0 for the same period in 2007.
The increase of $3,623,187 was driven by the acquisitions of the Company’s operating subsidiaries, WiseBuys, Hackett’s and North Country Hospitality.
Seaway Valley Capital Corporation had an operating loss of $1,488,992 for the three months ended September 30, 2008 versus $0 for the same period ended September 30, 2007.
This is related to the fact that the Company had no operations in the third quarter of 2007 while it had a full three months of operations in 2008.
We recognized income from continuing operations of $3,121,026 for the three months ended September 30, 2008, compared to a net income of $3,283,609 for the same period in 2007.
The primary driver of the 2008 income was a non-cash unrealized gain on derivative instruments.
That gain more than offset our increase in SG&A expenses, the expenses associated with the conversion of WiseBuys stores to Hackett’s stores, and the loss of potential revenues while these stores are being converted. Management feels that these conversions will be completed in 2009.
On July 1, 2007, when Seaway Capital, Inc. acquired control of the Company from GreenShift Corporation, the
Company sold its operating businesses to GS CleanTech Corporation, an affiliate of GreenShift, in return for the
assumption by GS CleanTech of a $1,125,000 convertible debenture owed by the Company.
These operations –considered “discontinued operations” - resulted in a gain of $2,234,974 during the three months ended September 30, 2007.
Net income for the periods ended September 30, 2008 and September 30, 2007 were $3,119,087 and $5,518,583, respectively.
The primary drivers for the income were a gain on the disposal discontinued operations of $2,234,974 in
2007 and the non-cash recognition of an unrealized gain on derivative instruments in 2008.
The gain in 2008 more than offset the expenses relating to the increased overhead associated with Hackett’s, the expenses related to the WiseBuys store conversions, and the reduced sales revenues suffered during store conversions.
Nine Months Ended September 30, 2008 Compared with Nine Months Ended September 30, 2007
The Company’s net sales increased to $13,533,715 for the nine month period ended September 30, 2008 from $0 for the nine months ended September 30, 2007, an increase of $13,533,715.
The increase in sales was the result of the acquisition of WiseBuys, Hackett’s and North Country Hospitality, which took place on October 23, 2007 and November 7, 2007, respectively.
The Company’s cost of goods sold also increased from $0 for the first nine months of 2007 to $8,953,729 during the same period in 2008.
This led to a $4,579,986 increase in our gross margin to $4,579,986 for fiscal period ended September 30, 2008 from $0 for fiscal period ended September 30, 2007.
Net realized and unrealized loss on the sale of securities was $106,556 during the period ended September 30, 2008 versus $0 for the same period ended September 30, 2007, an increase of $106,556.
Our general and administrative expenses during the nine months ended September 30, 2008 were $9,277,908 versus $2,036,704 for the same period in 2007.
The increase to $7,096,204 was driven by the acquisitions of the Company’s operating subsidiaries, WiseBuys and Hackett’s.
Seaway Valley Capital Corporation had an operating loss of $4,804,478 for the first nine months of fiscal 2008 versus a loss of $2,036,704 for the same period ended September 30, 2007.
We incurred a loss from continuing operations of $2,679,501 for the first nine months in fiscal 2008, compared to a loss of $1,909,785 for the same period in 2007.
The primary drivers of the 2008 loss were the increases in SG&A expenses, the expenses associated with the conversion of WiseBuys stores to Hackett’s stores, and the loss of potential revenues while these stores are being converted.
Management feels that these conversions will be completed in 2009.
On July 1, 2007, when Seaway Capital, Inc. acquired control of the Company from GreenShift Corporation, the
Company sold its operating businesses to GS CleanTech Corporation, an affiliate of GreenShift, in return for the
assumption by GS CleanTech of a $1,125,000 convertible debenture owed by the Company.
These operations –considered “discontinued operations” - resulted in a loss of $2,013,836 during the nine months ended September 30, 2007.
Net losses for the periods ended September 30, 2008 and September 30, 2007 were $2,682,636 and $3,923,621, respectively.
The primary drivers for the losses in 2008 were expenses relating to the increased overhead associated with Hackett’s, the expenses related to the WiseBuys store conversions, and the reduced sales revenues suffered during store conversions.
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