Vegalab Announces First Quarter 2018 Financial Results


Company Recognizes Total Revenues of $7,288,629

Revenue from Sale of Vegalab Products Increased 1206%

PALM BEACH, Fla., July 13, 2018 (GLOBE NEWSWIRE) -- 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 Leoushttps://connect.emailsrvr.com/owa/attachment.ashx?id=RgAAAABAlUum3GqxRLYffS1LfczsBwD%2fLTtFNofSRqepsK%2fG0buCAAAAV3pKAAD%2fLTtFNofSRqepsK%2fG0buCAAAAV9NIAAAJ&attcnt=1&attid0=EAAluo%2bh7IfIRpoQENtcD8Yk&attcid0=image001.png%4001D36F57.F06E8890
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 stock issued for conversion of notes payable$  75,000   - 
  
 The accompanying notes are an integral part of these unaudited financial statements.