VPR BRANDS, LP The following discussion and analysis of the financial condition and results of
operations of
Overview
We are a company engaged in the electronic cigarette and personal vaporizer industry. We own a portfolio of electronic cigarette and personal vaporizer patents which are the basis for our efforts to:
? Design, market and distribute a line of e-liquids under the "HELIUM" brand;
? Design, market and distribute a line of vaporizers for essential oils,
concentrates, and dry herbs under the "HONEYSTICK" brand;
? Design, market and distribute a line of cannabidiol ("CBD") products under the
"GOLD LINE" brand;
? Design, market and distribute electronic cigarettes and popular vaporizers
under the KRANE brand;
? Prosecute and enforce our patent rights;
? License our intellectual property; and
? Develop private label manufacturing programs.
Results of Operations for the Three Months Ended
Revenues
Our revenues for the three months ended
Cost of Sales
Cost of sales for the three months ended
Operating Expenses
Operating expenses for the three months ended
19
Other Income (Expense)
Net other income for the three months ended
Net Income
Net income for the three months ended
Results of Operations for the Six Months Ended
Revenues
Our revenues for the six months ended
Cost of Sales
Cost of sales for the six months ended
Operating Expenses
Operating expenses for the six months ended
Other Income (Expense)
Net other income for the six months ended
Net Loss
Net loss for the six months ended
Liquidity and Capital Resources
The Company used cash in operating activities of
During the six months ended
20
Assets
At
Liabilities
At
The Company plans to pursue equity funding to expand its brand. Through equity funding and the current operations, including the acquisition of the Vapor line of business, the Company expects to meet its current capital needs. There can be no assurance that additional capital will be available to us, or that, if available, it will be on terms satisfactory to us. Any additional financing may involve dilution to our shareholders. In the alternative, additional funds may be provided from cash flow in excess of that needed to finance our day-to-day operations, although we may never generate this excess cash flow. If we do not raise additional capital or generate additional funds, implementation of our plans for expansion will be delayed. If necessary we may withdraw from certain growth strategies to conserve cash for continued operations.
Going Concern
The Company had an accumulated deficit of
The Company will be required to obtain additional financing and capital and expects to satisfy its cash needs primarily from the additional issuance of equity securities or indebtedness in order to sustain operations until it can achieve profitability and positive cash flows, if ever. There can be no assurances, however, that adequate additional funding will be available on favorable terms, or at all. If such funds are not available in the future, the Company may be required to delay, significantly modify or terminate its operations, all of which could have a material adverse effect on the Company.
COVID-19
In
The spread of COVID-19, or another infectious disease, could also negatively affect the operations at our third-party manufacturers, which could result in delays or disruptions in the supply of our products. In addition, we may take temporary precautionary measures intended to help minimize the risk of the virus to our employees, including temporarily requiring all employees to work remotely, suspending all non-essential travel worldwide for our employees, and discouraging employee attendance at industry events and in-person work-related meetings, which could negatively affect our business.
The extent to which COVID-19 impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information which may emerge concerning the severity of COVID-19 and the actions to contain the coronavirus or treat its impact, among others. In particular, the continued spread of the coronavirus globally could adversely impact our operations, including among others, our manufacturing and supply chain, sales and marketing and could have an adverse impact on our business and our financial results. The COVID-19 outbreak is a widespread health crisis that has adversely affected the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products and likely impact our operating results.
This depends on the success of the vaccine distribution and its efficacy during the rest of the year which is uncertain. The Company has implemented work from home procedures and increased its online sales capabilities to be able to offset impact from such outbreaks in the future.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
21
Critical Accounting Estimates
The preparation of financial statements in conformity with GAAP requires the appropriate application of certain accounting policies, which require us to make estimates and assumptions about future events and their impact on amounts reported in our financial statements and related notes. Since future events and their impact cannot be determined with certainty, the actual results will inevitably differ from our estimates. Such differences could be material to the financial statements.
We believe our application of accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates, including those related to [IDENTIFY RELEVANT POLICIES AND ESTIMATES] are reevaluated on an ongoing basis, and adjustments are made when facts and circumstances dictate a change.
Historically, we have found our application of accounting policies to be
appropriate, and actual results have not differed materially from those
determined using necessary estimates. Our critical accounting policies and
estimates are discussed in and should be read in conjunction with our Annual
Report on Form 10-K for the year ended
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that may have an impact on the Company's accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flow when implemented.
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