OG LATAM May 2015
OG LATAM OG International, Inc.
OG LATAM
OG Mx
OG Pe
OG Ec
OG DR
OG Ja
OG CR
OG Co
! Table of Contents
OG LATAM I. Executive Summary II. Countries (a) MEXICO – Highlights and Financial Report (b) PERU – Highlights and Financial Report (c) ECUADOR – Highlights and Financial Report (d) DOMINICAN REPUBLIC COSTA RICA – Highlights and Financial Report (e) JAMAICA – Highlights and Financial Report (f) COSTA RICA – Highlights and Financial Report (g) COLOMBIA – Highlights and Financial Report
!
OG LATAM
ORGANO GOLD MEXICO
! Organo Gold International México, S de RL de CV
OG Mx
Income Statement 2013 (000's) USD
2014 %
DIFF
(000's) USD
%
(000's) USD
REVENUES
45,575
COGS
(9,948)
GROSS PROFITS
35,626
78.2
21,470
79.6
9,017
19.8
10,103
37.5
1,086
9,995
21.9
3,341
12.4
(6,655)
1,073
100.0
(21.8)
26,972 (5,501)
100.0
(20.4)
%
(18,603)
(40.8)
(4,447)
(44.7)
(14,156)
(39.7)
EXPENSES Commissions-Expense Office expenses Salaries and benefits Merchant and bank charges* Marketing Rent Professional fees Travel and entertainment System fees
NET INCOME BEFORE OTHER EXPENSE OTHER INCOME/EXPENSES NET INCOME BEFORE INCOME TAXES AND PROFIT SHARING
12.0 (66.6)
2.4
1,658
6.1
585
647
1.4
746
2.8
99
4,657
10.2
1,745
6.5
177
0.4
236
0.9
59
989
2.2
474
1.8
(515)
(52.1)
120
0.3
87
0.3
(33)
(27.8)
509
1.1
390
1.4
(119)
(23.4)
27,184
59.6
18,779
69.6
(8,404)
(30.9)
8,442
18.5
2,691
10.0
(5,752)
(68.1)
(761)
7,682
(1.7)
16.9
(132)
2,559
(0.5)
9.5
(2,912)
629
(5,123)
54.5 15.3 (62.5) 33.7
(82.7)
(66.7)
Provision for income tax Provision for profit sharing
(2,305)
(5.1)
(768)
(2.8)
(1,537)
66.7
(768)
(1.7)
(256)
(0.9)
(512)
66.7
NET INCOME**
4,609
10.1
1,536
5.7
(3,074)
(66.7)
!
OG Mx
!
OG Mx Highlights and other Significant Accounting and Finance Issues in 2014 COST REDUCTION
• Strategic change of main warehousing (Metropolitan area to SLP) • Optimizing routes among Distribution Centers • Changing telephone technology (Digital -‐ VOIP) • Applying new policies for expense reduction • Reducing Administration and IT Fees from HO
!
OG Mx Highlights and other Significant Accounting and Finance Issues in 2014 Increase in OPX’s
• Salaries and benefits Concept 2013 Salaries and benefits $ 1,073
2014 $ 1,658
Diff $ 585
26
72
46
HEADCOUNT Sales & Marketing Call Center Distribution Center Other
4 30 8 4 46
!
OG Mx Highlights and other Significant Accounting and Finance Issues in 2014 Increase in OPX’s
• Commissions: Concept
2013 (000's)
2014 %
(000's)
%
(000's)
45,575
Commission
5,510
12.1
6,114
22.7
604
11.0
Commission Recovery
3,507
7.7
3,956
14.7
449
12.8
Total Commissions
9,017
19.8
10,070
100
37.3
(18,603)
%
REVENUES
100
26,972
Diff
1,053
(41.0)
11.7
!
OG Mx Highlights and other Significant Accounting and Finance Issues in 2014
• Audit from: • Tax Authority • Sanitary Authority • Labor Authority • Tax expert firm • Tax Authority • International Trade
2013 2013 2014 2012 – 2014 2014 from 2010 – 2014
Done Done Done Done In progress In progress
!
OG Mx
Avg 28.9
33.2
29.9
23.7 Recommended 12%
8.7
! Organo'Gold'International'MĂŠxico,'S'de'RL'de'CV
OG Mx
Income'Statement 2013 45,575
REVENUES
(9,948)
COGS
35,626
GROSS PROFITS
% 100
(21.8)
78.2
2014 26,972 (5,501) 21,470
% 100
(20.4)
79.6
DIFF
%
Q1,'2015
(18,603)
(40.8)
4,663
100.0
(4,447)
(44.7)
(1,277)
(27.4)
(14,156)
(39.7)
3,387
72.6
EXPENSES Commissions-Expense Office expenses Salaries and benefits Merchant and bank charges* Marketing Rent Professional fees Travel and entertainment System fees
NET INCOME BEFORE OTHER EXPENSE OTHER INCOME/EXPENSES
9,017 9,995 1,073 647 4,657 177 989 120 509 27,184 8,442 (761)
59.6
10,103 3,341 1,658 746 1,745 236 474 87 390 18,779
18.5
2,691
19.8 21.9 2.4 1.4 10.2 0.4 2.2 0.3 1.1
(1.7)
(132)
69.6
1,086 (6,655) 585 99 (2,912) 59 (515) (33) (119) (8,404)
10.0
(5,752)
37.5 12.4 6.1 2.8 6.5 0.9 1.8 0.3 1.4
(0.5)
629
12.0 (66.6) 54.5 15.3 (62.5) 33.7 (52.1) (27.8) (23.4) (30.9)
1,888 1,056 441 111 397 52 82 10 4,037
40.5 22.6 9.5 2.4 8.5 1.1 1.8 0.2 86.6
(68.1)
(650)
(13.9)
(82.7)
166
3.6
(66.7)
(484)
(10.4)
NET INCOME BEFORE INCOME TAXES AND PROFIT SHARING Provision for income tax Provision for profit sharing NET INCOME**
7,682 (2,305) (768) 4,609
16.9
(5.1) (1.7)
10.1
2,559 (768) (256) 1,536
9.5
(5,123)
(0.9)
(1,537) (512)
5.7
(3,074)
(2.8)
66.7 66.7
(66.7)
7 2 (494)
0.2 0.1
(10.6)
!
OG Mx Highlights and other Significant Accounting and Finance Issues in 2014
• Commissions: Concept
2013 (000's)
2014 %
100
(000's)
%
(000's)
100
REVENUES
45,575
Commission
5,510
12.1
6,114
22.7
Commission Recovery
3,507
7.7
3,956
14.7
9,017
19.8
10,070
37.3
Total Commissions
26,972
Diff
2014 %
(000's)
%
(41.0)
4,663
100.0
604
11.0
1,178
25.3
449
12.8
710
15.2
(18,603)
1,053
11.7
1,888
40.5
!
OG LATAM
ORGANO GOLD PERU
!
OG Pe
Organo Gold Enterprises Peru Income Statement 2013 (000's) USD
2014 %
(000's) USD
DIFF %
(000's) USD
%
REVENUES
7,180
100.0
COGS
(1,380)
(19.2)
GROSS PROFITS
5,801
80.8
2,529
79.9
(3,272)
(56.4)
2,665
35.2
(1,550)
(58.2)
3,164 (635)
100.0
(20.1)
(4,016) 744
(55.9)
(54.0)
EXPENSES Commissions-Expense
37.1
1,115
Office expenses
125
1.7
194
6.1
69
Salaries and benefits
313
4.4
436
13.8
124
39.6
Merchant and bank charges*
223
3.1
112
3.5
(111)
100.0
1,371
19.1
459
14.5
(913)
(66.6)
80
1.1
101
3.2
21
26.1
664
9.2
55
1.7
(609)
(91.7)
35
0.5
23
0.7
(12)
(34.8)
100
1.4
43
1.4
(56)
100.0
5,575
77.6
2,538
80.2
(3,037)
(54.5)
226
3.1
(9)
(0.3)
(235)
(104.2)
41
0.6
(92)
(2.9)
(133)
AND PROFIT SHARING
267
3.7
(101)
(3.2)
(368)
(137.9)
Provision for income tax
99
1.4
10
0.3
(90)
(90.2)
168
2.3
(3.5)
(279)
(166.2)
Marketing Rent Professional fees Travel and entertainment System fees
NET INCOME BEFORE OTHER EXPENSE OTHER INCOME/EXPENSES
55.5
NET INCOME BEFORE INCOME TAXES
NET INCOME**
(111)
!
OG Pe
!
OG Pe Highlights and other Significant Accounting and Finance Issues in 2014
•SUNAT began audits of 2011, 2012 •Complete and update the accounting records with the available information of previous years •Saving for the company for taxes 2011 $100 k •Asking to the Tax Authority the refunds of taxes paid in excess for: 2012 $250 k 2013 $325 K •The annual Tax Return delivered in advance 2013 $117 k
!
OG Pe Highlights and other Significant Accounting and Finance Issues in 2014
Salaries and benefits •Revaluation and Adjustment of Salaries • Market price • Liability and Merits • Hire new country manager
!
OG Pe Highlights and other Significant Accounting and Finance Issues in 2014
• Renewed Sanitary registrations: •Black coffee, •Latte, •Mocha, •Hot chocolate •Green tea • Obtaining the permits to import samples of new products: •KOC Supreme, Black iced tea, Red tea
!
OG Pe
Organo'Gold'Enterprises'Peru Income'Statement 2013
2014
(000's) USD
REVENUES COGS GROSS PROFITS
%
DIFF
(000's) USD
3,164
%
Q1,'2015
(000's) USD
7,180
100.0
(1,380)
(19.2)
5,801
80.8
2,529
79.9
2,665 125 313 223 1,371 80 664 35 100 5,575
37.1
1,115 194 436 112 459 101 55 23 43 2,538
35.2
226
3.1
(9)
(0.3)
(235)
41
0.6
(92)
(2.9)
(133)
267
3.7
(101)
(3.2)
(368)
99
1.4
168
2.3
(635)
100.0
(20.1)
(4,016)
%
(000's) USD
%
(55.9)
603
100.0
(54.0)
(120)
(19.9)
(3,272)
(56.4)
483
80.1
(1,550) 69 124 (111) (913) 21 (609) (12) (56) (3,037)
(58.2)
27.0
(54.5)
163 66 116 19 37 26 1 6 7 441
(104.2)
42
7.0
(65)
(10.8)
(137.9)
(23)
(3.8)
(90)
(90.2)
(10)
(1.7)
(279)
(166.2)
(33)
(5.4)
744
EXPENSES Commissions-Expense Office expenses Salaries and benefits Merchant and bank charges* Marketing Rent Professional fees Travel and entertainment System fees NET INCOME BEFORE OTHER EXPENSE OTHER INCOME/EXPENSES NET INCOME BEFORE INCOME TAXES AND PROFIT SHARING Provision for income tax NET INCOME**
1.7 4.4 3.1 19.1 1.1 9.2 0.5 1.4 77.6
10 (111)
6.1 13.8 3.5 14.5 3.2 1.7 0.7 1.4 80.2
0.3 (3.5)
55.5 39.6 100.0 (66.6) 26.1 (91.7) (34.8) 100.0
10.9 19.3 3.2 6.2 4.2 0.2 0.9 1.2 73.1
!
OG LATAM
ORGANO GOLD ECUADOR
!
OG Ec
Organo'Gold'Enterprises'Ecuador Income'Statement 2013
2014
(000's) USD
REVENUES
%
(000's) USD
9,582
100.0
(2,403)
(25.1)
7,179
74.9
3,599 382 168 0 2,514 48 40 49 6,801
37.6
NET INCOME BEFORE OTHER EXPENSE NET INCOME BEFORE INCOME TAXES AND PROFIT SHARING
COGS GROSS PROFITS
DIFF
2,762
%
(000's) USD
%
100.0
(6,819)
(71.2)
(27.0)
1,656
(68.9)
2,015
73.0
(5,164)
(71.9)
38.2
68.7
(2,543) (292) 14 134 (2,343) (4) 138 (39) 32 (4,903)
(70.6)
71.0
1,057 90 182 134 171 44 178 9 32 1,898
378
3.9
117
4.2
(261)
(69.0)
378
3.9
117
4.2
(261)
(69.0)
71 57
0.7
0.5
(71) (44)
(100.0)
0.6
13
250
2.6
104
3.8
(146)
(58.4)
(747)
EXPENSES Commissions-Expense Office expenses Salaries and benefits Merchant and bank charges* Marketing Rent Professional fees Travel and entertainment System fees
Provision for income tax Provision for profit sharing NET INCOME**
4.0 1.8 0.0 26.2 0.5 0.4 0.5 -
3.3 6.6 4.9 6.2 1.6 6.5 0.3 1.2
-
(76.3) 8.2 100.0 (93.2) (8.1) 341.1 (80.6) 100.0 (72.1)
(77.1)
!
OG Ec
!
OG Ec
Organo'Gold'Enterprises'Ecuador Income'Statement 2013
2014
(000's) USD
REVENUES
%
(000's) USD
9,582
100.0
(2,403)
(25.1)
7,179
74.9
3,599 382 168 0 2,514 48 40 49 6,801
37.6
NET INCOME BEFORE OTHER EXPENSE NET INCOME BEFORE INCOME TAXES AND PROFIT SHARING
COGS GROSS PROFITS
DIFF
2,762
%
Q1,'2015
(000's) USD
%
(000's) USD
%
100.0
(6,819)
(71.2)
664
100.0
(27.0)
1,656
(68.9)
(172)
(25.8)
2,015
73.0
(5,164)
(71.9)
492
74.2
38.2
(72.1)
204 29 45 32 11 83 404
30.7
68.7
(2,543) (292) 14 134 (2,343) (4) 138 (39) 32 (4,903)
(70.6)
71.0
1,057 90 182 134 171 44 178 9 32 1,898
378
3.9
117
4.2
(261)
(69.0)
88
13.3
378
3.9
117
4.2
(261)
(69.0)
88
13.3
71 57
0.7
(77.1)
19 13
2.9
0.5
(71) (44)
(100.0)
0.6
13
250
2.6
104
3.8
(146)
(58.4)
56
8.4
(747)
EXPENSES Commissions-Expense Office expenses Salaries and benefits Merchant and bank charges* Marketing Rent Professional fees Travel and entertainment System fees
Provision for income tax Provision for profit sharing NET INCOME**
4.0 1.8 0.0 26.2 0.5 0.4 0.5 -
3.3 6.6 4.9 6.2 1.6 6.5 0.3 1.2
-
(76.3) 8.2 100.0 (93.2) (8.1) 341.1 (80.6) 100.0
4.3 6.7 4.9 1.7 12.6 60.9
2.0
!
OG Ec Highlights and other Significant Accounting and Finance Issues in 2014 Conclusions
• Reduction of 70% in Sales • Reduction 30% in office expenses • Increase Professional fees • Lawyer expenses • Auditors • Legal Services
!
OG Ec Highlights and other Significant Accounting and Finance Issues in 2014
• To make again the Accounting 2012 & 2013 • Submitted the Income Tax Return 2013 on time
!
OG Ec Highlights and other Significant Accounting and Finance Issues in 2014
• Previous Administration • Legitimization of Legal Representative • Publifast • Audits from different Authorities as follows: • Tax 2012 and 2013 • Sanitary • Superintendence of Companies • Lawsuits against the Company and LR
!
OG Ec Highlights and other Significant Accounting and Finance Issues in 2014
• Sanitary registration • Suspended registers • Wrong Product Name • Ingredients without ganoderma • Duration time 1 year product, instead 3 years • Wrong owner name Nores – OGMgt • Manufactured by OGEc for Nores • 5 Lawsuits
!
OG Ec Highlights and other Significant Accounting and Finance Issues in 2014
• Sanitary registration • Registers Reactivated • New Register of our products • All information • In progress
!
OG Ec Highlights and other Significant Accounting and Finance Issues in 2014
• Superintendence of Companies • Intervened • 2012 Done • 2013 Done • 2014 Done • Submitted all information to Validate and Release Co • CCO (Certificate of Obligations Compliance) (In progress)
!
OG LATAM
ORGANO GOLD ENTERPRISES DOMINICAN REPUBLIC
!
OG DR
Organo Gold Enterprises Dominican Republic Income Statement 2013
2014
(000's) USD
REVENUES COGS
4,464
(000's) USD
%
(000's) USD
(4,163)
%
100.0
300
100.0
(17.7)
(116)
(38.5)
3,671
82.3
185
61.5
(3,487)
(95.0)
1,985
(792)
GROSS PROFITS
%
DIFF
677
(93.3)
(85.4)
EXPENSES Commissions-Expense
44.5
141
47.1
(1,843)
(92.9)
Office expenses
40
0.9
22
7.4
(18)
(45.0)
Salaries and benefits
89
2.0
88
29.3
(1)
3
0.1
11
3.7
8
102
2.3
60
20.1
(41)
(40.7)
39
0.9
79
26.4
40
103.9
139
3.1
44
14.8
(94)
(68.0)
Travel and entertainment
9
0.2
8
2.6
(1)
(15.2)
System fees
-
-
3
1.0
3
100.0
2,406
53.9
457
152.3
(1,948)
(81.0)
1,266
28.4
(272)
(90.8)
(1,538)
(121.5)
(380)
(8.5)
(4)
(1.2)
AND PROFIT SHARING
886
19.9
(276)
(92.0)
Provision for income tax
-
Merchant and bank charges* Marketing Rent Professional fees
NET INCOME BEFORE OTHER EXPENSE OTHER INCOME/EXPENSES
(1.1) 100.0
376
NET INCOME BEFORE INCOME TAXES
NET INCOME**
886
-
19.9
(276)
-
(92.0)
(1,162) (1,162)
(131.2)
-
(131.2)
!
OG DR
!
OG DR
Organo'Gold'Enterprises'Dominican'Republic Income'Statement 2013 (000's) USD
REVENUES COGS
4,464
DIFF
(000's) USD
%
(000's) USD
100.0
300
100.0
(17.7)
(116)
(38.5)
3,671
82.3
185
61.5
1,985 40 89 3 102 39 139 9 2,406
44.5
47.1
53.9
141 22 88 11 60 79 44 8 3 457
1,266
28.4
(792)
GROSS PROFITS
2014 %
(4,163) 677
Q1'2015 % (93.3)
(000's) USD
104
% 100.0
(85.4)
(60)
(58.0)
(3,487)
(95.0)
44
42.0
(92.9)
4 5 15 1 2 14 10 50
3.6
152.3
(1,843) (18) (1) 8 (41) 40 (94) (1) 3 (1,948)
(272)
(90.8)
(1,538)
(4)
(1.2)
(276)
(92.0)
EXPENSES Commissions-Expense Office expenses Salaries and benefits Merchant and bank charges* Marketing Rent Professional fees Travel and entertainment System fees NET INCOME BEFORE OTHER EXPENSE OTHER INCOME/EXPENSES NET INCOME BEFORE INCOME TAXES AND PROFIT SHARING Provision for income tax NET INCOME**
0.9 2.0 0.1 2.3 0.9 3.1 0.2 -
(380)
(8.5)
886
19.9
(403)
(9.0)
1,289
28.9
(276)
7.4 29.3 3.7 20.1 26.4 14.8 2.6 1.0
(92.0)
(45.0) (1.1) 100.0 (40.7) 103.9 (68.0) (15.2) 100.0 (81.0)
376 (1,162) 403 (1,565)
(7)
(121.5)
-
(100.0) (121.4)
0.9 1.7 13.2 9.8 48.3 (6.3)
-
(7)
(131.2)
4.9 14.2
-
(6.3) -
(7)
(6.3)
!
OG DR Highlights and other Significant Accounting and Finance Issues in 2014
•The Company sales has plummeted in 2014 • Bad image of the company •Distributors output • Regularize all tax situation • Expenses control and reduction • Changed of payment process
!
OG DR Highlights and other Significant Accounting and Finance Issues in 2014
• High Inventory label about to expire • Exporting inventory to : • OG Pe Done • OG CR Done • OG Co Probably
!
OG LATAM
ORGANO GOLD JAMAICA
! Organo'Gold'Jamaica
OG Jm
Income'Statement 2013
2014 %
(000's) USD
REVENUES COGS GROSS PROFITS
1,151
DIFF %
(000's) USD
(000's) USD
(330)
%
100.0
821
100.0
(229)
(19.9)
(159)
(19.4)
922
80.1
662
80.6
(260)
(28.2)
649 31 67 69 20 47 4 1 21 908
56.4
436 47 59 53 38 44 4 3 8 693
53.1
(213) 16 (8) (15) 18 (3) 0 2 (13) (215)
(32.9)
14
1.2
(10)
(0.9)
70
(28.7)
(30.5)
EXPENSES Commissions-Expense Office expenses Salaries and benefits Merchant and bank charges* Marketing Rent Professional fees Travel and entertainment System fees NET INCOME BEFORE OTHER EXPENSE OTHER INCOME/EXPENSES
2.7 5.8 6.0 1.7 4.0 0.3 0.1 1.8 78.9
(32) 1
5.8 7.2 6.5 4.7 5.3 0.5 0.4 1.0 84.5 (3.9)
(45)
0.1
11
52.6 (11.2) (22.4) 92.2 (6.1) 1.4 151.6 (59.6) (23.7) >( 100)
NET INCOME BEFORE INCOME TAXES
4
0.3
(31)
(3.7)
(34)
>( 100)
NET INCOME**
4
0.3
(31)
(3.7)
(34)
>( 100)
!
OG Jm
!
OG DR Highlights and other Significant Accounting and Finance Issues in 2014
• Market very stable • Managing under austere policy
!
OG LATAM
ORGANO GOLD COSTA RICA
! Organo'Gold'Costa'Rica
OG CR
Income'Statement 2014
Q1'2015
(000's) USD
%
(000's) USD
%
REVENUES
199
COGS
(43)
GROSS PROFITS
156
78.4
162
80.7
20 29 8 11 68
10.0
68 44
33.9
88
100.0
(21.6)
200 (39)
100.0
(19.3)
EXPENSES Commissions-Expense Office expenses Salaries and benefits Merchant and bank charges* Marketing Rent Professional fees Travel and entertainment System fees NET INCOME**
14.4 4.0 5.7
21.8 -
-
-
4
1.9
34.1
115
57.6
44.3
46
23.1
-
-
!
OG CR Highlights and other Significant Accounting and Finance Issues in 2014
• Started in October 2014 • No office • Pay commissions locally