PALM BEACH, Fla., June 04, 2018 (GLOBE NEWSWIRE) -- Vegalab, Inc. ("the Company"), (OTCQB:VEGL) today announced its 2017 Financial Results. 

Vegalab Inc. holds the exclusive North and South America distribution rights to a suite of Earth friendly products that includes biological pesticides, natural fertilizers, and specialty biological products marketed under the “Vegalab” brand (“The Agronomy Business”).  Sales in 2017 slowed during the first three quarters due to a combination of adverse weather in California, and the Company’s customers using products left over from 2016 purchases. In the fourth quarter, however, the Company began selling its products through two of the twenty-five largest agricultural retailers in the United States, one of which agreed to a $13 million minimum purchase requirement for 2018 in its distribution agreement.

Management strategically grew the Company in October of 2017, with the acquisition of substantially all of the assets related to a produce packing business located in Tulare County, California (the "Packing Business").  The acquisition added tangible assets to the Company’s balance sheet of 11 acres of real property and 30,000 sq. ft. of buildings located in the heart of the California citrus growing region. The purchase included all equipment, inventory, customers, suppliers, contract rights, and intangible property of the prior owner/operators. In addition, this thirteen-year-old business, with annual revenues of $8.6 Million in 2016, produced immediate synergies and new opportunities. Recognizing the potential to dramatically increase capacity, the company invested $350,000 in equipment to increase pack line efficiency and cold storage space, changes that could increase production by 200%. Should demand warrant, by simply adding another shift the Company could potentially triple the revenue of the Packing Business and dramatically increase its profits.

The acquisition of the Packing Business is a part of the Company’s long-term plan to grow its business both organically and through strategic, geographically complimentary, acquisitions. Not only did the acquisition add immediate cash flow and incremental revenues to the Company, with several customers of the Packing Business already using Vegalab's all natural products to maximize yields and increase the number of premium quality fruits produced in their citrus groves, the acquisition provides synergistic growth opportunities for both the Company’s Packing Business and the Company’s Agronomy Business.

David Selakovic, CEO of Vegalab, Inc., stated; “In the next few weeks, we will announce our First Quarter Earnings for Fiscal Year 2018.  We look forward to sharing the successful business trajectory of Vegalab Inc., as we expand the Company’s offerings and operations while pursuing new markets and business opportunities in North and South America.” 

Results of Operations

During the year ended December 31, 2017, the Company recognized total revenues of $2,491,391 compared to $2,115,421 for the year ended December 31, 2016, including sales of $361,083 from the sale of Vegalab products compared to $2,115,421 for the year ended December 31, 2016. Product sales in 2017 slowed until the fourth quarter, due to a combination of adverse weather in California and our customers using products carried over from purchases in mid to late 2016. On October 18, 2017, the Company purchased substantially all the assets of a produce packaging business conducted under the name M&G Packing, Inc. From October 18, 2017 through December 31, 2017 the Company generated revenues of $2,130,308 from processing revenue.

Cost of goods sold were $2,057,619 for the year ended December 31, 2017, Compared to $1,617,366 for the year ended December 31, 2016. Cost of goods sold for our Vegalab products decreased due to reduced sales of Vegalab products. Cost of goods of $1,774,279 on our produce packaging business was under M&G Packing, Inc. from October 18, 2017 through December 31, 2017. During the year ended December 31, 2017 expenses increased significantly as the Company hired additional staff, consultants and professionals due to its purchase of M&G Packing, Inc. During the year ended December 31, 2017 the Company recorded an expense of $180,181 as an impairment of assets acquired in its purchase of M&G Packaging, Inc.

Total operating expenses for the year ended December 31, 2017, were $2,116,404 compared to $593,334 for the year ended December 31, 2016. For the year ended December 31, 2017, loss from operations was $1,682,632 compared to 95,279 for the year ended December 31, 2016.

After the provision for income taxes, net loss for the year ended December 31, 2017, was $1,673,779 or $0.08 per share, and the net loss for the year ended December 31, 2016 was $116,361 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

Vegalab, Inc. (formerly HPC Acquisitions, Inc.)
Consolidated Balance Sheets 
 As of As of
 December 31, December 31,
  2017   2016 
ASSETS   
Current Assets   
  Cash and cash equivalents$  342,534  $  151 
  Accounts receivable, net   1,674,583     671,279 
  Inventory   1,595,148     1,889,423 
  Prepaid expenses   339,389     20,540 
Total Current Assets   3,951,654     2,581,393 
Fixed assets, net   821,322     -  
Deposits   14,500   14,500- 
Total assets$  4,787,476  $  2,595,893 
    
LIABILITIES AND STOCKHOLDERS’ EQUITY    
    
Current Liabilities   
  Accounts payable – trade$  409,239  $  67,563 
  Accounts payable – related party   712,947     1,727,857 
  Accrued amounts owed to growers   860,694     -  
  Accrued income taxes   -      17,036 
  Accrued interest payable - related party   1,894     2,474 
  Note Payable - Current Portion   2,904     -  
  Capital lease obligation - Current Portion   3,409     -  
  Notes payable related party   -      175,000 
Total Current Liabilities   1,991,087     1,989,930 
    
  Capital lease obligations   18,235     - 
  Notes payable   428,958     - 
Total Liabilities   2,438,280     1,989,930 
    
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, 23,162,897 and 20,140,000
  shares issued and outstanding, respectively
   23,163     20,140 
Additional paid-in capital   4,791,488     1,377,499 
Accumulated deficit   (2,465,455)    (791,676)
    
Total Stockholders’  Equity   2,349,196     605,963 
    
Total Liabilities and Stockholders’ Equity$  4,787,476  $  2,595,893 
 
The accompanying notes are an integral part of these consolidated financial statements.


Vegalab, Inc. (formerly HPC Acquisitions, Inc.)   
Consolidated Statements of Operations    
For the Years Ended December 31, 2017 and 2016   
  2017   2016 
    
Revenues:   -    
Processing Revenue$  2,130,308     -  
Products sales   361,083     2,115,421 
  Total Revenue   2,491,391     2,115,421 
    
Cost of Goods Sold:   
Cost of processing   1,774,279     -  
Cost of Goods Sold   283,340     1,617,366 
  Total Cost of Goods Sold   2,057,619     1,617,366 
    
Gross Profit   433,772     498,055 
    
Operating expenses   
  General and administrative expenses   1,936,223     593,334 
  Loss on impairments   180,181    - 
    
  Total operating expenses   2,116,404     593,334 
    
Loss from operations   (1,682,632)    (95,279)
    
Other income (expense)   
  Interest Expense   (8,183)    (4,046)
    
  Loss before provision for income taxes   (1,690,815)    (99,325)
    
Provision for income taxes   (17,036)    17,036 
    
Net Loss$  (1,673,779) $  (116,361)
    
Loss per weighted-average shares of common stock outstanding - basic and fully diluted$  (0.08) $  (0.01)
    
Weighted-average number of common shares outstanding - basic and fully diluted   21,004,615     17,669,571 
 
The accompanying notes are an integral part of these consolidated financial statements.


 

Vegalab, Inc. (formerly HPC Acquisitions, Inc.)
   
Consolidated Statements of Changes in Stockholders’ Equity   
For the Years ended December 31, 2017 and 2016   
          
      Additional    
 Common Stock  paid-in  Accumulated  
 Shares  Amount  capital  deficit  Total
          
Balance at December 31, 20156,989,000 $  6,989 $  503,380 $  (675,315) $  (164,946)
          
Sale of common stock for cash13,011,000    13,011    690,089    -      703,100 
          
Common stock issued for services140,000    140    184,030    -      184,170 
          
Net Loss for the year  -     -     -     (116,361)    (116,361)
          
Balance at December 31, 201620,140,000 $  20,140 $  1,377,499 $  (791,676) $  605,963 
          
Sale of common stock for cash2,822,899    2,822    2,537,779    -      2,540,601 
          
Common stock issued for services200,000    200    325,800    -      326,000 
          
Compensation expense associated with option awards  -       550,411    -      550,411 
      -       
Net Income for the year  -     -     -     (1,673,779)    (1,673,779)
           . 
Balance at December 31, 201723,162,899 $  23,162 $  4,791,489 $  (2,465,455) $  2,349,196 
 
The accompanying notes are an integral part of these consolidated financial statements.
 


Vegalab, Inc. (formerly HPC Acquisitions, Inc.)   
Consolidated Statements of Cash Flows   
For the Years Ended December 31, 2017 and 2016   
  2017   2016 
Cash flows from operating activities   
  Net income (loss) for the period$  (1,673,779) $  (116,361)
  Adjustments to reconcile net loss to net cash provided by operating activities   
  Depreciation expense   20,362     -  
  Impairment of fixed assets   180,181     -  
  Stock option expense   550,411     -  
  Common stock issued for services   27,162     184,170 
  (Increase) Decrease in   
  Accounts receivable   (1,003,305)    (671,279)
  Inventory   294,275     (1,889,423)
  Prepaid expenses   (20,016)    (33,790)
  Increase (Decrease) in   
  Accounts payable   1,202,373     64,811 
  Accounts payable – related party   (1,012,436)    1,727,857 
  Accrued income taxes  (17,036)    17,036 
  Accrued interest  -      (7,643)
  Accrued interest payable to controlling stockholder  (580 )    (21,953)
    
  Net cash used in operating activities   (1,452,388)    (746,575)
    
Cash flows from investing activities   
  Purchase of fixed assets   (566,460)    -  
  Net Cash flows from investing activities   (566,460)    -  
    
Cash flows from financing activities   
Cash paid on notes payable to investors   -      (122,300)
Cash received / (repaid) from issuance of note payable – related party   (177,474)    175,000 
  Cash received (paid) on notes payable to controlling stockholder, net   -      (87,352)
  Cash paid on vehicle loan   (1,899)   -  
  Proceeds from sale of common stock   2,540,604     703,100 
    
  Net cash provided by financing activities   2,361,231     668,448 
   .   
Increase (decrease) in Cash   342,383     (78,127)
    
Cash at beginning of period   151     78,278 
    
Cash at end of period$  342,534  $  151 
    
  Supplemental disclosure of interest and income taxes paid   
  Interest paid for the period$  10,657  $  34,244 
  Income taxes paid for the period   -      -  
    
NON-CASH TRANSACTIONS:   
  Fixed assets acquired through issuance of debt$  8,761     -  
  Fixed assets acquired through issuance of debt -M&G acquisition$  425,000     -  
  Capital lease obligation$  21,644     -  
 
The accompanying notes are an integral part of these consolidated financial statements.