PALM BEACH, Fla., July 16, 2018 (GLOBE NEWSWIRE) -- In a release issued under the same headline on July 13, 2018, by Vegalab, Inc. (OTCQB:VEGL), please note that the row "Common equity issued for acquisition of business" was excluded from the Condensed Consolidated Statements of Cash Flows table. The corrected release follows:
Vegalab Announces First Quarter 2018 Financial Results
Company Recognizes Total Revenues of $7,288,629
Revenue from Sale of Vegalab Products Increased 1206%
Vegalab, Inc. ("the Company"), (OTCQB:VEGL) today reported results for the quarter ended March 31, 2018.
Vegalab operates in two segments of the food industry; the Agronomy Business and the Packing Business. The Agronomy Business involves the manufacture and distribution of all-natural crop protection, crop health, and soil enhancement products. The Packing Business operates a citrus packing facility. Because growers who use our crop protection and plant health products are potential users of our citrus packing services, and vice versa, management believes that these two business units are complementary and will create synergistic growth for both business units.
In February of 2018, the Company acquired The Agronomy Group, LLC, a California limited liability company (“TAG”), a producer and distributor of environmentally friendly agrochemicals. TAG had been our top U.S. sales organization, so the acquisition significantly expanded the Company’s internal marketing capabilities. Furthermore, the TAG product line complemented the existing Vegalab product line, and thus increased the number of products that we have available to offer our customers.
Mr. Selakovic, CEO of Vegalab, Inc., stated: “The acquisition of The Agronomy Group, LLC, was a strategic business decision that expanded the Company’s offerings and footprint in the United States. Additionally, due to Company improvements and better streamlining of operations, revenue from the sale of Vegalab products increased 1206 percent compared to the three months ended March 31, 2017. We will continue to build out our business and expand our footprint in key regions. Management continues to seek strategic partners who will help increase our market share in North and South America.” He concluded, “Demand for our natural and organic products that help restore the earth’s damaged soil continues to grow, and we look forward to serving the stewards of better agriculture.”
Results of Operations
During the three months ended March 31, 2018, the Company recognized total revenues of $7,288,629 compared to $208,816 for the three months ended March 31, 2017. Revenue from the sale of Vegalab products was $2,729,141 compared to $208,816 for the three months ended March 31, 2017.
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 first quarter of 2018 the Company generated $4,559,488 from processing revenue. As this business was acquired in October 2017, there was no corresponding revenue in the first quarter of 2017.
Cost of goods sold for the agrochemicals business were $1,345,165 for the three months year ended March 31, 2018, compared to $189,451 for the three months ended March 31, 2017.
Cost of goods for our produce packaging business was $4,350,936 for the three months ended March 31, 2018. There was no corresponding cost of goods for our produce packaging business in the first quarter of 2017 for the reason stated above.
Total operating expenses for the three months ended March 31, 2018, were $1,641,932 compared to $189,451 for the three months ended March 31, 2017. For the three months ended March 31, 2018, loss from operations was $49,404 compared to $239,870 for the three months ended March 31, 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 March 31, 2017.
After the provision for interest and income taxes, net loss for the three months ended March 31, 2018, was $56,769 or $(0.00) per share, and the net loss for the three months ended March 31, 2017 was $225,148 or $(0.01) 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 and the Packing Business. 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) | ||||||||
| March 31, | December 31, | |||||||
| 2018 | 2017 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 647,022 | $ | 342,534 | ||||
| Accounts receivable, net | 1,834,279 | 1,619,274 | ||||||
| Inventory | 1,527,934 | 1,650,457 | ||||||
| Prepaid expenses | 301,664 | 339,389 | ||||||
| Total Current Assets | 4,310,899 | 3,951,654 | ||||||
| Fixed assets, net | 1,023,464 | 821,322 | ||||||
| Intangible assets, net | 3,751,934 | - | ||||||
| Goodwill | 457,407 | - | ||||||
| Deposits | - | 14,500 | ||||||
| Total assets | $ | 9,543,704 | $ | 4,787,476 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable – trade | $ | 987,746 | $ | 409,239 | ||||
| Accounts payable – related party | 796,236 | 714,841 | ||||||
| Accrued amounts owed to growers | 730,997 | 860,694 | ||||||
| Vehicle loan - current portion | 2,904 | 2,904 | ||||||
| Capital lease obligation - current portion | 3,409 | 3,409 | ||||||
| Total Current Liabilities | 2,521,292 | 1,991,087 | ||||||
| Vehicle Loan | 3,457 | 3,958 | ||||||
| Capital lease obligations - long term | 18,235 | 18,235 | ||||||
| Notes payable to purchasers | 350,000 | 425,000 | ||||||
| Total Liabilities | 2,892,984 | 2,438,280 | ||||||
| Commitments and Contingencies | ||||||||
| 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 | 23,788 | 23,163 | ||||||
| Additional paid-in capital | 9,149,156 | 4,791,488 | ||||||
| Accumulated deficit | (2,522,224 | ) | (2,465,455 | ) | ||||
| Total Stockholders’ Equity | 6,650,720 | 2,349,196 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 9,543,704 | $ | 4,787,476 | ||||
| The accompanying notes are an integral part of these unaudited financial statements. | ||||||||
| Vegalab, Inc. | ||||||||
| Condensed Consolidated Statements of Operations | ||||||||
| For the Three Months Ended March 31, 2018 and 2017 | ||||||||
| (Unaudited) | ||||||||
| For the Three Months Ended March 31, | ||||||||
| 2018 | 2017 | |||||||
| Revenues: | - | |||||||
| Processing revenue | $ | 4,559,488 | - | |||||
| Products sales | 2,729,141 | 208,816 | ||||||
| Total Revenue | 7,288,629 | 208,816 | ||||||
| Cost of Goods Sold: | ||||||||
| Cost of processing | 4,350,936 | - | ||||||
| Cost of goods sold | 1,345,165 | 189,451 | ||||||
| Total Cost of Sales | 5,696,101 | 189,451 | ||||||
| Gross Profit | 1,592,528 | 19,365 | ||||||
| Operating expenses | ||||||||
| General and administrative expenses | 1,641,932 | 259,235 | ||||||
| Total operating expenses | 1,641,932 | 259,235 | ||||||
| Income (loss) from operations | (49,404 | ) | (239,870 | ) | ||||
| Other income (expense) | ||||||||
| Interest Expense | (7,365 | ) | (2,314 | ) | ||||
| Loss before provision for income taxes | (56,769 | ) | (242,184 | ) | ||||
| Provision for income taxes | - | 17,036 | ||||||
| Net loss | $ | (56,769 | ) | $ | (225,148 | ) | ||
| Loss per weighted-average shares of common stock outstanding, computed on net loss - basic and fully diluted | $ | (0.00 | ) | $ | (0.01 | ) | ||
| Weighted-average number of common shares outstanding - basic and fully diluted | 23,567,343 | 20,183,284 | ||||||
| The accompanying notes are an integral part of these unaudited financial statements. | ||||||||
| Vegalab, Inc. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| For the Three Months Ended March 31, 2018 and 2017 | ||||||||
| (Unaudited) | ||||||||
| For the Three Months Ended March 31, | ||||||||
| 2018 | 2017 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) for the period | $ | (56,769 | ) | $ | (225,148 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities | ||||||||
| Depreciation expense | 38,060 | - | ||||||
| Loss on disposition of fixed assets | 14,502 | - | ||||||
| Amortization expense | 82,066 | - | ||||||
| Stock option expense | 27,295 | - | ||||||
| (Increase) Decrease in | ||||||||
| Accounts receivable | (34,250 | ) | (60,908 | ) | ||||
| Inventory | 67,764 | 75,323 | ||||||
| Prepaid expenses | 52,225 | (6,267 | ) | |||||
| Increase (Decrease) in | ||||||||
| Accounts payable | (503,777 | ) | 37,879 | |||||
| Accounts payable – related party | 83,322 | 184,757 | ||||||
| Amounts owed to growers | 730,997 | - | ||||||
| Accrued income taxes | - | (17,036 | ) | |||||
| Accrued interest payable to controlling stockholder | - | 1,675 | ||||||
| Net cash provided by operating activities | 501,435 | (160,371 | ) | |||||
| Cash flows from investing activities | ||||||||
| Cash acquired from acquisition of business | 22,994 | - | ||||||
| - | - | |||||||
| Purchase of fixed assets | (219,440 | ) | - | |||||
| Net cash used in investing activities | (196,446 | ) | - | |||||
| Cash flows from financing activities | ||||||||
| Cash paid on notes payable to controlling stockholder, net | - | (31,244 | ) | |||||
| Payment for capital leases | (501 | ) | - | |||||
| Proceeds from sale of common stock | - | 230,660 | ||||||
| Net cash used in financing activities | (501 | ) | 199,356 | |||||
| . | ||||||||
| Increase (decrease) in Cash | 304,488 | 38,985 | ||||||
| Cash at beginning of period | 342,534 | 151 | ||||||
| Cash at end of period | $ | 647,022 | $ | 39,136 | ||||
| Supplemental disclosure of interest and income taxes paid | ||||||||
| Interest paid for the period | $ | 443 | $ | 1,675 | ||||
| Income taxes paid for the period | $ | - | $ | - | ||||
| Non-cash investing and financing activities | ||||||||
| Common equity issued for acquisition of business | $ | 4,256,000 | - | |||||
| Common stock issued for conversion of notes payable | $ | 75,000 | - | |||||
| The accompanying notes are an integral part of these unaudited financial statements. | ||||||||