FORT LAUDERDALE, FL, Nov. 15, 2018 (GLOBE NEWSWIRE) — via NEWMEDIAWIRE — VPR Brands, LP (OTC PINK: VPRB) (“VPR Brands”), a market leader in innovation specializing in accessories and vaporizers for essential oils, cannabis concentrates and extracts, as well as cannabidiol (CBD), has released its third quarter 2018 and year to date results of operations.
Dan Hoff, VPR Brands’ Chief Operating Officer, commented, “We have continued to gain traction in building our infrastructure, diversifying our product lines, obtaining new sales channels, and increasing the overall awareness of our brands. This was a rather strong quarter and our team made significant accomplishments to better enable our future growth efforts.”
“I am beyond pleased with our results, as we were able to maintain and continue our positive momentum in the third quarter. Our team has been working diligently to increase operational efficiencies and maximize our organic sales growth, while increasing profit margins throughout the year,” said Kevin Frija, VPR Brands’ Chief Executive Officer. “We have also worked to reduce and replace any outstanding convertible debt with new short-term and long-term notes, which has added to shareholder value.”
Results of Operations for the Nine Months Ended September 30, 2018 Compared to the Nine Months Ended September 30, 2017
Revenues
Our revenue for the nine months ended September 30, 2018 and 2017 was $3,487,265 and $2,792,796, respectively. The increase is a result of introduction of new product lines during the current quarter.
Cost of Sales
Cost of sales for the nine months ended September 30, 2018 and 2017 was $2,018,964 and $1,710,066, respectively. The increase is a result of increased sales during the nine months ended September 30, 2018 due to the Company’s introduction of new product lines.
Operating Expenses
Operating expenses for the nine months ended September 30, 2018 were $1,315,250 as compared to $1,523,572 for the nine months ended September 30, 2017. The decrease in expenses is due to reduced general, selling and administrative costs as a result of lower payroll and professional fees for the nine months ended September 30, 2018.
Other (Expense)
Other expense for the nine months ended September 30, 2018 and 2017 was of $454,716 and $320,201, respectively. The increase is a result of the loss on the extinguishment of debt in the nine months ended September 30, 2018. There were fewer debt conversions in the prior year as compared to the current year. The loss was offset by lower interest in the nine months ended September 30, 2018 as a result of lower loan balances during 2018 and gains on the change in derivative liability.
Net Loss
Net loss for the nine months ended September 30, 2018 was $301,665 compared to a net loss of $761,043 for the nine months ended September 30, 2017. The net loss decreased primarily as the result of higher sales and operating income in the nine months ended September 30, 2018.
Results of Operations for the Three Months Ended September 30, 2018 Compared to the Three Months Ended September 30, 2017
Revenues
Our revenues for the three months ended September 30, 2018 and 2017 were $1,271,317 and $969,455, respectively. The increase is a result of increased sales due to the Company’s introduction of new product lines during the quarter ended September 30, 2018.
Cost of Sales
Cost of sales for the three months ended September 30, 2018 and 2017 was $877,129 and $573,136, respectively. The increase is a result of the Company’s introduction of new products lines during the quarter ended September 30, 2018.
Operating Expenses
Operating expenses for the three months ended September 30, 2018 were $374,751 as compared to $435,376 the three months ended September 30, 2017. The decrease in expenses is due to reduced selling, general, and administrative costs as a result of lower payroll and professional fees for the quarter ended September 30, 2018.
Other Income (Expense)
Other income (expense) for the three months ended September 30, 2018 and 2017 was expenses of $(140,155) and income of $107,266, respectively. The increase of expenses is a result of the gain on interest expense from notes payable outstanding in 2018. There were no debt conversions in the current period.
Net Profit (Loss)
Net loss for the three months ended September 30, 2018 was $(120,718) compared to a net profit of $68,189 for the quarter ended September 30, 2017. The net loss has increased mainly as the result of higher interest expense and no gains from debt conversions in quarter ended September 30, 2018.
Liquidity and Capital Resources
The Company used cash in operating activities of $297,420 for the nine months ended September 30, 2018 as compared to $439,513 used in the nine months ended September 30, 2017. The decrease in cash used is mainly a result of the lower loss for the year.
During the nine months ended September 30, 2018 and 2017, the Company was provided cash from financing activities of $434,594, of which $1,065,022 was proceeds from the notes payable offset by $630,428 of payments to the notes. The Company had separate private placements in 2017 of $75,000 and draws on notes with DiamondRock, LLC (“DiamondRock”) for $300,000.
Total notes payable as of September 30, 2018 is $1,076,281 as compared to $666,855 at December 31, 2018.
Assets
At September 30, 2018 and December 31, 2017, we had total assets of $1,017,612 and $471,101, respectively. Assets consist primarily of cash, inventory, accounts receivable, vendor deposits, intangible assets and prepaid expenses in 2018 and 2017.
Liabilities
Our total liabilities were $1,299,807 at September 30, 2018, compared to $1,302,743 at December 31, 2017. The decrease was primarily due to a decrease in derivative liabilities which have zero balance and then offset by increase in notes payable.
Off –Balance Sheet Arrangements
As of September 30, 2018, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.
Although VPR Brands’ sales are not segregated by brand or product category, its primary revenue source is from vaporization devices specifically created for use with medical cannabis and recreational marijuana. These devices are specifically created for use with extract oils and concentrates which are vaped, providing optimal results and the best experience for patients and recreational users. Vaporizers are far more convenient and discrete compared to traditional cannabis use methods. These units are compact, easy to carry and concealable. Modern cannabis vaporizers do not emit distinct and lingering odors that are affiliated with traditional marijuana use. VPR Brands believes that portable vaporizers are the fastest growing delivery mechanism for marijuana. VPR Brands’ team is currently working with market leaders within the cannabis growth and extraction industries to innovate and further educate the marketplace on its advantages.
About HoneyStick:
HoneyStick is a lifestyle brand that combines the features of high tech, high performance, dependability and affordability when it comes to upper tier vaporizers. From being the first to market in creating a sub ohm vaporizer to the latest Ripper and Plasma GQ, the HoneyStick team works with a vast network of growers, extractors, and industry figures to bring the needs of patients and recreational users to life. HoneyStick is sold online and through a diverse network of distributors, e-tailers, dispensaries and smoke shops. For more information about HoneyStick, please visit vapehoneystick.com.
About VPR Brands LP:
VPR Brands is a technology company whose assets include issued U.S. and Chinese patents for atomization related products including technology for medical marijuana vaporizers and electronic cigarette products and components. VPR Brands is also engaged in product development for the vapor or vaping market, including e-liquids, vaporizers and electronic cigarettes (also known as e-cigarettes) which are devices which deliver nicotine and or cannabis through atomization or vaping, and without smoke and other chemical constituents typically found in traditional products. For more information about VPR Brands, please visit vprbrands.com.
Forward-Looking Statements:
This news release contains statements that involve expectations, plans or intentions, and other factors discussed from time to time in VPR Brands’ Securities and Exchange Commission filings. These statements are forward-looking and are subject to risks and uncertainties, so actual results may vary materially. We caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.