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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 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 stock issued for conversion of notes payable $   75,000       -  
   
  The accompanying notes are an integral part of these unaudited financial statements.

/EIN News/ --