/EINPresswire.com/ -- NEW YORK, NEW YORK -- (Marketwired) -- 08/16/16 -- Gilla Inc. ("Gilla" or the "Company") (OTCQB: GLLA), the fast-growing designer, manufacturer and marketer of E-liquid for vaporizers, released its financial results for the three months ended June 30, 2016 which included a significant increase in quarter-over-quarter gross profit margins and continued growth of international sales.

Q2 2016 HIGHLIGHTS:

--  For the three months ended June 30, 2016, the Company generated $911,595
    in revenues primarily through sales of high margin proprietary E-liquid
    products.
--  Gross profit margins jumped to 62% in the second-quarter of 2016 as
    compared to 37% in the first-quarter of 2016. This positive bump was
    primarily attributable to the Company's efforts to generate high margin
    returns from global sales of its premium E-liquid products.
--  Revenues generated outside of North America grew to 43% of total sales
    in the second-quarter of 2016 reflecting positive results from the
    Company's focus on broadening its sales to international markets.
--  Net loss amounted to $1,492,225 for the second-quarter of 2016 as
    compared to a net loss of $905,868 in the first-quarter of 2016. The
    quarter-over-quarter increase in net loss was primarily attributable to
    increases in administrative expenses from the acquisitions closed in
    late 2015 and the Company's international growth and expansion. It is
    anticipated that the Company will see significant cost savings from the
    consolidation of certain operating activities now that the acquisitions
    have been fully integrated.
--  The Company had previously forecasted revenues of $3 million for the six
    month period ended June 30, 2016. While the Company was focused on
    moving its revenues towards the higher margin proprietary products, the
    shift away from OEM occurred much quicker than was anticipated. OEM
    revenues were in excess of $1.1 million for the first-quarter of 2016
    which had dropped below $120 thousand for the second-quarter of 2016.
    Factors that contributed to this include the introduction of the
    "Deeming Regulation" on May 10, 2016 by the U.S. Food and Drug
    Administration (FDA) which finalized a new rule which extends the FDA's
    authority to include the regulation of electronic nicotine delivery
    systems (such as E-liquid, E-cigarettes and other vapor products) in the
    United States as of August 8, 2016. The introduction created a slight
    pause in sales and added to the slowing of OEM revenue given many of the
    smaller brands in the industry must now contemplate their future. In
    addition, the Company allocated resources to develop and launch new E-
    liquid brands for the U.S. which was required to be completed prior to
    the August 8, 2016 deadline. Revenue from sales of proprietary brands
    increased to $793 thousand in the second-quarter of 2016 from $200
    thousand in the first-quarter of 2016.
--  During the second-quarter of 2016, Gilla launched four new proprietary
    brands and a number of new flavors within Gilla's existing brands in
    order to have marketed and sold such new products in the market prior to
    the regulatory grandfather dates in both Europe and U.S. This
    development significantly strengthened the Company's product portfolio
    as the industry becomes increasingly regulated and the barriers to entry
    stiffen.
--  The Company is reiterating its expectation for cash flow breakeven from
    operations in the second half of 2016.

"The Company's strategic plan is coming to fruition very quickly and it's exciting to see our broad brand portfolio now enjoying success across multiple markets, from Asia to North America and from Europe to Africa. Our growth in international sales demonstrates Gilla's significant progress in becoming a leading player in the global vape market," stated J. Graham Simmonds, Chairman and CEO of Gilla. "The higher margin business has been our primary focus and our numbers demonstrate major growth in the second quarter for that segment of our operations. This will be our continued focus into the second half of the year as we continue to grow sales domestically while also exploring the opportunities to expand our global footprint."

About Gilla Inc.

Gilla Inc. manufactures, markets and distributes E-liquid, which is the liquid used in vaporizers, E-cigarettes, and other vaping hardware and accessories. E-liquid is heated by the atomizer to deliver the sensation of smoking. Gilla aims to be a global leader in the manufacturing and distribution of E-liquid for the vapor industry. The Company provides consumers with choice and quality across categories and price points. Gilla's product portfolio includes Coil Glaze, The Drip Factory, Surf Sauce, Siren, VaporLiq, Craft Vapes, Craft Clouds, Vape Warriors, Miss Pennysworth's Elixirs, The Mad Alchemist, Replicant and Crown E-liquid brands.

Forward-looking Statements

Note: This press release contains "forward looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on currently available competitive, financial and economic data and management's views and assumptions regarding future events. Such forward-looking statements are inherently uncertain. Gilla Inc. cannot provide assurances that the matters described in this press release will be successfully completed or that the company will realize the anticipated benefits of any transaction. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to: global economic and market conditions; the war on terrorism and the potential for war or other hostilities in other parts of the world; the availability of financing and lines of credit; successful integration of acquired or merged businesses; changes in interest rates; management's ability to forecast revenues and control expenses, especially on a quarterly basis; unexpected decline in revenues without a corresponding and timely slowdown in expense growth; the company's ability to retain key management and employees; intense competition and the company's ability to meet demand at competitive prices and to continue to introduce new products and new versions of existing products that keep pace with technological developments, satisfy increasingly sophisticated customer requirements and achieve market acceptance; relationships with significant suppliers and customers; as well as other risks and uncertainties, including but not limited to those detailed from time to time in Gilla Inc. SEC filings. Gilla Inc. undertakes no obligation to update information contained in this release. For further information regarding risks and uncertainties associated with Gilla Inc.'s business, please refer to the risks and uncertainties detailed from time to time in Gilla Inc.'s SEC filings.

For more information, please visit gilla.com.

Contacts:
Gilla Inc.
Mr. J. Graham Simmonds
Chairman and CEO
1 (416) 843-2881
graham.simmonds@gilla.com
twitter: @gillainc

For media inquiries
Gilla Inc.
Mr. Don Fenton
VP of Communications
1 (416) 434-3681
don.fenton@gilla.com

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.