PALM BEACH, Fla., Sept. 04, 2018 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE - Vegalab, Inc. ("the Company"), (OTCQB: VEGL) today announced revenue for the second quarter of fiscal year 2018, ended June 30, 2018. The Company posted quarterly revenue of $4.1 million. These results compare to revenue of $166 thousand in the second quarter of fiscal 2017, a 2,370% year over year increase. The Company filed Form 10-Q with the United States Securities Exchange Commission on August 30, 2018.
David Selakovic, CEO of Vegalab, Inc., stated: “We are excited to report continued year over year growth, having increased our six months total revenues to $11.4 Million, a 2,940% increase over the first six months of last year. We attribute our continued growth to the addition of talented sales and marketing personnel, new marketing partnerships, and, most importantly, repeat sales demand due to high overall customer satisfaction. Members of the agricultural community are increasingly coming to recognize the comprehensive benefits of using Vegalab’s extensive, all-natural products on their farms, orchards, and vineyards. Stewardship of the Earth’s ecosystems will always be our focus at Vegalab, as we develop sustainable products that nourish rather than deplete the Earth’s resources. As we continue to grow, we will seek additional product registrations in key agricultural markets within the United States, Canada and Mexico, as we also pursue partnerships in targeted growth markets within Central and South America.”
Results of Operations
During the three months ended June 30, 2018, the Company recognized total revenues of $4,166,321 compared to $166,682 for the three months ended June 30, 2017. Revenue from the sale of Vegalab products was $2,632,478 compared to $166,682 for the three months ended June 30, 2017, sales increased during the three months ended June 30, 2018 compared to 2017 mainly due to increased marketing and the acquisition of TAG in February 2018. Revenue from packing business was $2,632,478. Cost of goods sold were $4,456,814 for the three months ended June 30, 2018, compared to $120,979 for the three months ended June 30, 2017. During the three months ended June 30, 2018 the Company had a negative gross profit margin from its packing business. The negative gross margin was due to higher than expected costs for the purchase of produce and reduced processing as the growing season comes to an end.
During the six months ended June 30, 2018, the Company recognized total revenues of $11,454,950 compared to $375,498 for the six months ended June 30, 2017. Revenue from the sale of Vegalab products was $5,361,619 compared to $375,498 for the six months ended June 30, 2017. Sales increased during the six months ended June 30, 2018 compared to 2017 mainly due to increased marketing and the acquisition of TAG in February 2018. Revenue from produce processed was $6,093,311. Cost of goods sold was $10,152,915 for the six months ended June 30, 2018, compared to $310,430 for the six months ended June 30, 2017. During the six months ended June 30, 2018. The Company experienced lower than expected gross profit margin from the packing business. The negative gross margin was due to higher than expected costs for the purchase of produce and reduced processing as the growing season comes to an end.
On October 18, 2017, the Company purchased substantially all the assets of a produce packaging business conducted under the name M&G Packing, Inc. During the three months ended June 30, 2018 the Company generated $1,533,843 from processing revenue. As this business was acquired in October 2017, there was no corresponding revenue in the second quarter of 2017. Cost of goods for our produce packaging business was $1,841,494 for the three months ended June 30, 2018. There was no corresponding cost of goods sold for our produce packaging business in the second quarter of 2017 for the reason stated above.
During the six months of 2018 the Company generated $6,093,331 from processing revenue in our produce packing business. There was no corresponding revenue in the six months of 2017 for the reason stated above. Cost of goods sold for our produce packaging business was $6,192,430 for the six months ended June 30, 2018. There was no corresponding cost of goods sold for our produce packaging business in the six months of 2017 for the reason stated above.
Total operating expenses for the three months ended June 30, 2018, were $717,470 compared to $298,148 for the three months ended June 30, 2017. Expenses increased significantly as the Company hired additional staff, consultants and professionals due to its purchase of M&G Packing, Inc. and TAG compared to the three months ended June 30, 2017. For the three months ended June 30, 2018, we had a loss from operations of $1,007,963 compared to a loss of $252,445 for the three months ended June 30, 2017.
Total operating expenses for the six months ended June 30, 2018, were $2,359,402 compared to $557,383 for the six months ended June 30, 2017. Expenses increased significantly for the reasons stated above compared to the six months ended June 30, 2017. For the six months ended June 30, 2018, we had a loss from operations of $1,057,367 compared to a loss of $492,315 for the six months ended June 30, 2017.
After the provision for interest and income taxes, net loss for the three months ended June 30, 2018, was $1,018,350 or $(0.04) per share, and the net loss for the three months ended June 30, 2017 was $253,844 or $(0.01) per share.
After the provision for interest and income taxes, net loss for the six months ended June 30, 2018, was $1,075,119 or $(0.05) per share, and the net loss for the six months ended June 30, 2017 was $513,064 or $(0.02) per share.
About Vegalab, Inc.
Vegalab, Inc. is the exclusive distributor in North and South America of a line of all-natural, biologically derived pesticides, fertilizers, and specialty agricultural products. Vegalab’s pesticides are highly effective against targeted organisms, non-toxic to beneficial organisms, and safe for the environment. Vegalab products support a healthy soil biome and are cost competitive with synthetic chemicals that do just the opposite. The Company operates in two segments of the food industry. The Agronomy Business involves the manufacture and distribution of all-natural crop protection, crop health, and soil enhancement products: and The Packing Business is the operation of a citrus packing facility.
Safe Harbor for Forward-looking Statements
This news release may contain forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. While these statements are made to convey to the public the Company's progress, business opportunities, and growth prospects, they are based on management's current beliefs and assumptions as to future events. However, since the Company's operations and business prospects are always subject to risk and uncertainties, the forward-looking events and circumstances discussed in this news release might not occur, and actual results could differ materially from those described, anticipated, or implied. For a more complete discussion of such risks and uncertainties, please refer to the Company's filings with the Securities and Exchange Commission.
Contact:
Sean Leous
Media Relations
Vegalab Inc.
636 US Highway 1, suite 110
North Palm Beach, FL 33408, US
T + 800 208 1680 Ext. 714
http://vegalab.us
TABLES TO FOLLOW
| Vegalab, Inc. | |||||||||||||||||
| Condensed Consolidated Balance Sheets | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| June 30, | December 31, | ||||||||||||||||
| 2018 | 2017 | ||||||||||||||||
| ASSETS | |||||||||||||||||
| Current Assets | |||||||||||||||||
| Cash and cash equivalents | $ | 222,170 | $ | 342,534 | |||||||||||||
| Accounts receivable, net | 964,005 | 1,674,583 | |||||||||||||||
| Inventory | 3,659,107 | 1,595,148 | |||||||||||||||
| Prepaid expenses | 286,909 | 339,389 | |||||||||||||||
| Total Current Assets | 5,132,191 | 3,951,654 | |||||||||||||||
| Fixed assets, net | 1,110,243 | 821,322 | |||||||||||||||
| Intangible assets, net | 2,963,751 | - | |||||||||||||||
| Goodwill | 1,151,407 | - | |||||||||||||||
| Deposits | 16,682 | 14,500 | |||||||||||||||
| Total assets | $ | 10,374,274 | $ | 4,787,476 | |||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
| Current Liabilities | |||||||||||||||||
| Accounts payable – trade | $ | 1,628,225 | $ | 409,239 | |||||||||||||
| Accounts payable – related party | 2,496,157 | 714,841 | |||||||||||||||
| Accounts payable - growers | 214,353 | 860,694 | |||||||||||||||
| Vehicle loan - current portion | 2,904 | 2,904 | |||||||||||||||
| Capital lease obligation - current portion | 3,409 | 3,409 | |||||||||||||||
| Total Current Liabilities | 4,345,048 | 1,991,087 | |||||||||||||||
| Vehicle Loan | 2,501 | 3,958 | |||||||||||||||
| Capital lease obligation - long term | 16,760 | 18,235 | |||||||||||||||
| Note payable | 350,000 | 425,000 | |||||||||||||||
| Total Liabilities | 4,714,309 | 2,438,280 | |||||||||||||||
| Commitments | |||||||||||||||||
| Stockholders’ Equity | |||||||||||||||||
| Preferred stock – $0.001 par value, 10,000,000 shares authorized, none issued and outstanding | - | - | |||||||||||||||
| Common stock – $0.001 par value, 50,000,000 shares authorized, 23,787,897 and 23,162,897 shares issued and outstanding, respectively | 23,787 | 23,163 | |||||||||||||||
| Additional paid-in capital | 9,176,752 | 4,791,488 | |||||||||||||||
| Accumulated deficit | (3,540,574 | ) | (2,465,455 | ) | |||||||||||||
| Total Stockholders’ Equity | 5,659,965 | 2,349,196 | |||||||||||||||
| Total Liabilities and Stockholders’ Equity | $ | 10,374,274 | $ | 4,787,476 | |||||||||||||
| The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. | |||||||||||||||||
| Vegalab, Inc. | |||||||||||||||||
| Condensed Statements of Operations | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| For the Three Months Ended | For the Six Months Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||
| Revenues: | |||||||||||||||||
| Produce processing revenue | $ | 1,533,843 | $ | - | $ | 6,093,331 | $ | - | |||||||||
| Fertilizer sales | 2,632,478 | 166,682 | 5,361,619 | 375,498 | |||||||||||||
| Total Revenue | 4,166,321 | 166,682 | 11,454,950 | 375,498 | |||||||||||||
| Cost of Goods Sold: | |||||||||||||||||
| Cost of processing | 1,841,494 | - | 6,192,430 | - | |||||||||||||
| Cost of goods sold | 2,615,320 | 120,979 | 3,960,485 | 310,430 | |||||||||||||
| Total Cost of Goods Sold | 4,456,814 | 120,979 | 10,152,915 | 310,430 | |||||||||||||
| Gross Profit (Loss) | (290,493 | ) | 45,703 | 1,302,035 | 65,068 | ||||||||||||
| Operating expenses | |||||||||||||||||
| General and administrative expenses | 717,470 | 298,148 | 2,359,402 | 557,383 | |||||||||||||
| Total operating expenses | 717,470 | 298,148 | 2,359,402 | 557,383 | |||||||||||||
| Loss from operations | (1,007,963 | ) | (252,445 | ) | (1,057,367 | ) | (492,315 | ) | |||||||||
| Other expense | |||||||||||||||||
| Interest expense | (10,387 | ) | (1,399 | ) | (17,752 | ) | (3,713 | ) | |||||||||
| Loss before provision for income taxes | (1,018,350 | ) | (253,844 | ) | (1,075,119 | ) | (496,028 | ) | |||||||||
| Provision for income taxes | - | - | - | 17,036 | |||||||||||||
| Net Loss | $ | (1,018,350 | ) | $ | (253,844 | ) | $ | (1,075,119 | ) | $ | (478,992 | ) | |||||
| Loss per weighted-average share of common stock outstanding, computed on net loss - basic and fully diluted | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.02 | ) | |||||
| Weighted-average number of common shares outstanding - basic and fully diluted | 23,787,897 | 20,652,218 | 23,567,343 | 20,419,046 | |||||||||||||
| The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. | |||||||||||||||||
| Vegalab, Inc. | |||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| For the Six Months Ended | |||||||||||||||||
| June 30, | |||||||||||||||||
| 2018 | 2017 | ||||||||||||||||
| Cash flows from operating activities | |||||||||||||||||
| Net loss for the period | $ | (1,075,119 | ) | $ | (478,992 | ) | |||||||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities | |||||||||||||||||
| Depreciation expense | 86,469 | 866 | |||||||||||||||
| Loss on disposition of fixed assets | 14,637 | - | |||||||||||||||
| Amortization expense | 176,248 | - | |||||||||||||||
| Stock option expense | 54,891 | - | |||||||||||||||
| (Increase) Decrease in | |||||||||||||||||
| Accounts receivable | 836,023 | (65,755 | ) | ||||||||||||||
| Inventory | (2,063,410 | ) | (12,502 | ) | |||||||||||||
| Prepaid expenses | 53,297 | (2,030 | ) | ||||||||||||||
| Changes in working capital: | |||||||||||||||||
| Increase (Decrease) in | |||||||||||||||||
| Accounts payable | 997,306 | (4,668 | ) | ||||||||||||||
| Accounts payable – related party | 1,783,338 | 244,488 | |||||||||||||||
| Accounts payable - growers | (646,344 | ) | - | ||||||||||||||
| Accrued income taxes | - | (17,036 | ) | ||||||||||||||
| Net cash provided by /(used in) operating activities | 217,336 | (335,629 | ) | ||||||||||||||
| Cash flows from investing activities | |||||||||||||||||
| Cash acquired from acquisition of business | 22,994 | - | |||||||||||||||
| Purchase of fixed assets | (354,762 | ) | (10,395 | ) | |||||||||||||
| Deposits on lease | (3,000 | ) | - | ||||||||||||||
| Net cash used in investing activities | (334,768 | ) | (10,395 | ) | |||||||||||||
| Cash flows from financing activities | |||||||||||||||||
| Cash paid on notes payable to controlling stockholder, net | - | (172,307 | ) | ||||||||||||||
| Payment for capital leases | (1,457 | ) | - | ||||||||||||||
| Payment of notes payable | (1,475 | ) | |||||||||||||||
| Proceeds from sale of common stock | - | 644,600 | |||||||||||||||
| Net cash (used in) provided by financing activities | (2,932 | ) | 472,293 | ||||||||||||||
| . | |||||||||||||||||
| (Decrease) increase in cash | (120,364 | ) | 126,269 | ||||||||||||||
| Cash at beginning of period | 342,534 | 151 | |||||||||||||||
| Cash at end of period | $ | 222,170 | $ | 126,420 | |||||||||||||
| Supplemental disclosure of interest and income taxes paid | |||||||||||||||||
| Interest paid for the period | $ | 17,752 | $ | 1,675 | |||||||||||||
| Income taxes paid for the period | $ | $ | - | ||||||||||||||
| Non-cash investing and financing activities | |||||||||||||||||
| Issuance of note payable for property, plant and equipment | $ | - | $ | 8,761 | |||||||||||||
| Common stock and warrants issued for acquisition of business | $ | 4,256,000 | $ | - | |||||||||||||
| Common stock issued for conversion of note payable | $ | 75,000 | $ | - | |||||||||||||
| The accompanying notes are an integral part of these unaudited consolidated condensed financial statements. | |||||||||||||||||