We primarily engage in researching, developing, manufacturing and selling bamboo charcoal biomass organic fertilizers, amino acid water-soluble fertilizers, selenium-rich foliage fertilizers and other types of fertilizers in the PRC through our subsidiary, Jiangxi Kenongwo Technology Co., Ltd. ("Jiangxi Kenongwo"), a company incorporated under the laws of the PRC.
Our financial statements are prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP.
The Company plans to continue its expansion and investments, which will require continued improvements in revenue, net income, and cash flows.
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Comparison of the Three months ended June 30, 2022 and 2021
The Company's disaggregate revenue streams are summarized as follows:
Revenues - Solid organic fertilizers $ 1,654,237 $ 174,164 Revenues - Liquid organic fertilizers
Cost of revenues for the fertilizers was $1.30 million and $0.33 million for the three months ended June 30, 2022 and 2021, respectively, representing an increase of 295.56%. The increase in cost of revenues was in line with an increase in revenue.
Our gross profit was $0.35 million and negative $0.12 million with gross margin of 21.21% and negative 57.95%, for the three months ended June 30, 2022 and 2021, respectively. The negative gross margin increased because the revenue increased 692.91% while the cost of revenue increased 295.56% for the three months ended June 30, 2022 compared to the same period in 2021.
Our selling expenses were $54,856 for the three months ended June 30, 2022, representing an decrease of $4,944 or 8.27% compared to $59,800 for the three months ended June 30, 2021.
Research and Development ("R&D") Expenses
Comparison of the Six months ended June 30, 2022 and 2021
The Company's disaggregate revenue streams are summarized as follows:
Revenues - Solid organic fertilizers $ 3,547,374 $ 242,847 Revenues - Liquid organic fertilizers
Cost of revenues - Solid organic fertilizers $ 2,730,872 $ 389,931 Cost of revenues - Liquid organic fertilizers
Our selling expenses were $118,803 for the six months ended June 30, 2022, representing a decrease of $10,589 or 8.18% compared to $129,392 for the six months ended June 30, 2021.
General and administrative expenses increased by $220,031, or 177.75% from $123,786 for the six months ended June 30, 2021 to $343,817 for the same period in 2022 due to increase salaries.
Research and Development ("R&D") Expenses
Our working capital deficit was $3,290,269 and $3,760,370 as of June 30, 2022 and December 31, 2021, respectively.
We have financed our operations over the six months ended June 30, 2022 and 2021 primarily through proceeds from advances from related parties.
The components of cash flows are discussed below:
Net cash used in operating activities $ (494,519 ) $ (678,858 ) Net cash used in investing activities
Cash used in Operating Activities
Cash used in Investing Activities
Cash Provided by Financing Activities
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