10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission file number: 0-53248

VEGALAB, INC. 

(Exact Name of Registrant as Specified in its Charter)

Nevada	68-0635204
State or Other Jurisdiction of Incorporation or Organization	I.R.S. Employer Identification No.
636 U.S. Highway 1, Ste. 110, North Palm Beach, FL	33408
Address of Principal Executive Offices	Zip Code

(800) 208-1680

Registrant’s Telephone Number, Including Area Code

HPC Acquisitions, Inc.

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨  (Do not check if a smaller reporting company)	Smaller reporting company x
Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. At March 31, 2018 23,787,897 shares of common stock, par value $0.001.

Vegalab, Inc.

Form 10-Q for the Quarter Ended March 31, 2018

Table of Contents

	Page
Part I - Financial Information
Item 1 - Financial Statements (Unaudited)	3
Item 2 - Management's Discussion and Analysis of Financial Condition and Plan of Operations	15
Item 3 - Quantitative and Qualitative Disclosures about Market Risk	16
Item 4 - Controls and Procedures	16
Part II - Other Information
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 6 - Exhibits	17
Signatures	18

2

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		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.

3

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		$	-
Product 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.

4

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		-			230,600
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 equity issued for acquisition of business	$	4,256,000		$	-
Common stock issued for conversion of note payable	$	75,000		$	-

The accompanying notes are an integral part of these unaudited financial statements.

5

Vegalab, Inc. (formerly HPC Acquisitions, Inc.)

Notes to Condensed Consolidated Financial Statements

March 31, 2018

(Unaudited)

Note A - Organization and Description of Business

Vegalab Inc. (formerly HPC Acquisitions, Inc.) (the “Company”) was initially formed under the laws of the State of Minnesota as Herky Packing Co. on July 17, 1968. The Company initially produced and marketed meat snack foods, principally beef jerky, smoked dried beef and snack sausages, through food brokers, distributors and wagon jobbers. Despite a 1970 restructuring, including the relocation to an approximate 12,500 square foot production facility, the Company’s efforts were unsuccessful and all operations were terminated by the end of 1970. On April 10, 1972, the Company changed its corporate name to H. P. C. Incorporated. In connection with this name change, the Company acquired Ed Stein’s Tire Center, Inc., a Minneapolis, Minnesota-based distributor of Gates tires. This acquisition was unsuccessful and reversed in 1973.

On August 7, 2006, the Company changed its state of incorporation from Minnesota to Nevada by means of a merger with and into HPC Acquisitions, Inc., a Nevada corporation formed on June 12, 2006 solely for the purpose of effecting the reincorporation. The Articles of Incorporation and Bylaws of the Nevada Corporation are the Articles of Incorporation and Bylaws of the surviving corporation. Such Articles of Incorporation modified the Company’s capital structure to allow for the issuance of up to 50,000,000 shares of $0.001 par value common stock and up to 10,000,000 shares of $0.001 par value preferred stock.

On March 8, 2016, the Company sold 12,011,000 shares of its common stock to David Selakovic for a total cash purchase price of $303,100. This transaction effected a change in management and control of the Company. Mr. Selakovic assigned to the Company certain assets consisting of the exclusive right to distribute in the Western Hemisphere natural agrochemicals developed by ECOWIN Co., Ltd., a Korean company, certain state permits for the sale of ECOWIN agrochemicals, and the trademark “Vegalab” (the “DS Assets”).Our new plan of operation is to commence the business of selling ECOWIN products under the brand name “Vegalab” and the business of selling citrus products under the brand name “M&G”.

The Company is currently in the business of selling the ECOWIN products under the “Vegalab” name in the United States of America. The Company’s current sole source of supply of ECOWIN products is through Vegalab S. A., a Swiss company solely owned by David Selakovic, the Company’s controlling shareholder and sole officer and director.

On October 18, 2017, the Company purchased substantially all the assets of a produce packaging business conducted under the name M&G Packing, Inc. located in Tulare County, California. The acquisition consisted of purchasing the real property and building used in the business from M & G Farms, Inc., a California corporation, and all of the equipment, inventory, customers, suppliers, contract rights, and intangible property from M&G Packing, Inc., a California corporation.

On November 6, 2017, the Company amended its Articles of Incorporation to change its name to Vegalab, Inc.

On December 29, 2017, Vegalab exercised an option to purchase The Agronomy Group LLC, a California limited liability company (“TAG”). On January 22, 2018, Vegalab and TAG entered into a Member Units Purchase Agreement under which Vegalab agreed to purchase all of the member units in TAG from its two members for a total of 600,000 shares of common stock of Vegalab, and warrants to purchase 1,600,000 shares of the common stock of Vegalab at an exercise price of $1.20 per share exercisable over a term of five years. The acquisition was closed February 20, 2018, effective February 1, 2018.

Note B - Preparation of Financial Statements

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles and has a fiscal year-end of December 31.

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The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the U. S. Securities and Exchange Commission on its Annual Report on Form 10-K for the year ended December 31, 2017.

In the opinion of management, the accompanying interim financial statements, prepared in accordance with the U.S. Securities and Exchange Commission’s instructions for Form 10-Q, should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report filed with the SEC on Form10-K for the year ended December 31, 2017, and are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented. The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full fiscal year ending December 31, 2017.

Note C - Going Concern Uncertainty

The Company’s principal business plan is to distribute, in the Western Hemisphere, certain natural agrochemicals developed by ECOWIN Co., Ltd., a Korean company, under the brand name “Vegalab”. The Company also operates a produce packaging business. However, there is no assurance that the Company will be able to successfully penetrate its targeted markets or implement its business plan.

The Company's continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis. The Company faces considerable risk in its business plan. If insufficient operating capital is available during the next twelve months, the Company will be forced to rely on existing cash in the bank and additional funds loaned by management and/or significant stockholders.

The Company’s former majority stockholder previously provided the necessary working capital to maintain the corporate status of the Company. It is the current intent of management and significant stockholders to provide sufficient working capital, if necessary, to support and preserve the integrity of the corporate entity. However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist. There is no legal obligation for either management or significant stockholders to provide additional future funding.

The Company anticipates offering future sales of equity securities. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.

The Company’s certificate of incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock and 50,000,000 shares of common stock. The Company’s ability to issue preferred stock may limit the Company’s ability to obtain debt or equity financing as well as impede potential takeover of the Company, which takeover may be in the best interest of stockholders. The Company’s ability to issue these authorized but unissued securities may also negatively impact our ability to raise additional capital through the sale of our debt or equity securities.

In such a restricted cash flow scenario, the Company would be unable to complete its business plan steps, and would, instead, delay all cash intensive activities. Without necessary cash flow, the Company may become dormant during the next twelve months, or until such time as necessary funds could be raised in the equity securities market.

While the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future to reach its goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps. These factors raise substantial doubt about the Company’s ability to continue to operate as a going concern for the twelve months following the issuance date of these consolidated financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

7

Note D - Summary of Significant Accounting Policies 

1. Principle of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Vegalab, Inc. and its wholly owned subsidiaries, M&G Packaging Inc, and The Agronomy Group LLC. All intercompany accounts have been eliminated in the consolidation.

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim information and with the instructions to Form 10-Q and Regulation S-K. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments consisting of a normal and recurring nature considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2018 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2018.

2. Cash and Cash Equivalents

The Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

2. Concentrations of Credit Risk

Sales to three customers comprised 46%, 31% and 22% of the Company's product sales revenues for the three months ended March 31, 2018. the one customer accounted for 92%  accounts receivable as of March 31, 2018.

Sales to three customers comprised 29%, 12% and 12% of the Company's processing revenues for the three months ended March 31, 2018. Four customers accounted of 68% or 20%, 19%, 18% and 11% of accounts receivable as of March 31, 2018. Sales to two customers comprised 60% and 28% of the Company’s total revenues for the Three months ended March 31, 2017. Two customers accounted for 78% and 8% of accounts receivable, respectively, as of December 31, 2017. The Company believes that, in the event that its primary customers are unable or unwilling to continue to purchase the Company’s goods, there are a number of alternative customers at comparable prices.

3. Accounts Receivable

In the normal course of business, the Company extends unsecured credit to virtually all of its customers which are located throughout the United States. Because of the credit risk involved, management has provided an allowance for doubtful accounts which reflects its opinion of amounts which will eventually become uncollectible. In the event of complete non-performance, the maximum exposure to the Company is the recorded amount of trade accounts receivable shown on the balance sheet at the date of non-performance. March 31, 2018 and December 31, 2017, the Company recorded allowances of $9,154 and $2,915, respectively, for doubtful accounts from certain sales that occurred but not assessed to be collectible.

4. Inventory

Inventory consists of finished goods related to the sale of certain natural agrochemicals developed by ECOWIN Co., Ltd., a Korean company, under the brand name “Vegalab”. Inventory is valued at the lower of cost or market using the average cost method. A change in income is taken when factors that would result in a need for a reduction in the valuation, such as excess or obsolete inventory, are noted. At March 31, 2018 and December 31, 2017, there was no reserve for excess or obsolete inventory. M&G Farms from time to time holds customer’s inventory on a consignment basis until it is sold. As of March 31, 2018 there was no consignment inventory held by the Company.

5. Property, plant and equipment

Property, plant and equipment are recorded at cost, net of accumulated depreciation. Depreciation is calculated by using the straight-line method over the estimated useful lives of the assets, excluding lands, which is five years for all categories and ten years for buildings.

8

Automobile, computer equipment, and leasehold improvements consisted of the following:

	March 31, 2018			December 31, 2017
Automobile	$	14,261		$	14,261
Land		141,000			142,475
Building		199,338			374,338
Machinery and equipment		749,468			490,791
Total		1,104,067			1,021,865
Impairment recognized upon acquisition		-			(179,452	)
Impairment recognized subsequent to acquisition		-			(729	)
Accumulated depreciation		(80,603	)		(20,362	)
Balance at the end of period	$	1,023,464		$	821,322

Depreciation expense for the three months ended March 31, 2018 and 2017 was $38,060 and $0, respectively.

6. Note Payable

On October 18, 2017, the Company purchased substantially all the assets of a produce packaging business conducted under the name M&G Packing, Inc. located in Tulare County, California. The total purchase price for the business plus closing costs was $854,452, which was paid $429,452 in cash and $425,000 in the form of a promissory note secured by the real property that bears interest at the rate of 6.0% per annum with interest only payable monthly and all principal and interest due 18 months from the close of escrow on October 24, 2017. On January 26, 2018, the Company issued 25,000 shares of common stock to M&G Farms, Inc., which was credited as a payment of $75,000 of principal and interest on the promissory note from the Company to M&G Farms from the Company to M&G Farms.

7. Revenue Recognition

Revenue is recognized when the earnings process is completed, the risks and rewards of ownership have transferred to the customer, which is generally the same day as delivery or shipment of the product, the price to the buyer is fixed or determinable, and collection is reasonably assured. All sales are recorded when the goods are shipped.

The Company ships all product and fruit on an FOB-Plant, “as-is” basis. Accordingly, revenue is recognized by the Company at the point at which an order is shipped at a fixed price, collection is reasonably assured and the Company has no remaining performance obligations related to the sale. The Company sells all products and fruit with “no right of return” by the purchaser for any factor other than defects in the products.

8. Income (Loss) per Share

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).

Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.

For the three months ended March 31, 2018 and 2017, the Company’s potentially dilutive shares, which include outstanding common stock options that have not been included in the computation of diluted net loss per share as the result would have been anti-dilutive.

9

	March 31, 2018		December 31, 2017
Options		448,000		448,000
Warrants		1,600,000
Total		2,048,000		448,000

9. Amortization and Impairment of Long-Lived Assets

Amortization and impairment of long-lived assets are non-cash expenses relating primarily to non-compete agreements and trademarks website acquisitions. The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10, "Accounting for the Impairment or Disposal of Long-Lived Assets". This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Non-compete provisions are amortized over five years and trademark and other intangibles are amortized over 10 years. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

10. Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments in this Update are intended render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In April 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” ASU 2016 - provides guidance regarding the classification of certain items within the statement of cash flows.  ASU 2016-15 is effective for annual periods beginning after December 15, 2017, with early adoption permitted.  The Company does not believe this ASU will have an impact on our results of operation, cash flows, other than presentation, or financial condition.

On November 17, 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”, a consensus of the FASB’s Emerging Issues Task Force (the “Task Force”). The new standard requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. ASU No. 2016-18 is effective for public business entities for fiscal years beginning after December 15, 2017. The Company does not believe this ASU will have an impact on our results of operation, cash flows, other than presentation, or financial condition.

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The Company does not expect the adoption of other recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flows.

Note E – Acquisition of Business

On December 29, 2017, Vegalab exercised an option to purchase The Agronomy Group LLC, a California limited liability company (“TAG”). On January 22, 2018, Vegalab and TAG entered into a Member Units Purchase Agreement under which Vegalab agreed to purchase all of the member units in TAG from its two members for a total of 600,000 shares of the common stock of Vegalab, and warrants to purchase 1,600,000 shares of the common stock of Vegalab at an exercise price of $1.20 per share exercisable over a term of five years. The acquisition was closed February 20, 2018, effective February 1, 2018. The Company recognized the assets acquired and liabilities assumed from TAG at their fair value on the acquisition date, and the excess in purchase price over these values it was allocated to intangible assets and goodwill. The estimated fair values of assets acquired and liabilities assumed, were determined based on management’s best estimates. Preliminary estimated fair values are subject to measurement period adjustments which represent updates made to the preliminary purchase price allocation based on revisions to valuation estimates in the interim period subsequent to the acquisition and initial accounting date up until the purchase price allocation is finalized which cannot be any later than one year from the acquisition date. The Company engaged a third-party valuation specialist to assist in the valuation and is in the process of completing its assessment of the fair value of assets acquired and liabilities assumed. Thus the preliminary measurement of the assets acquired and liabilities assumed are subject to change, which could be significant. The Company will finalize the amounts recognized no later than one year from the acquisition date.

The following table shows the preliminary purchase price, estimated acquisition-date fair values of the assets acquired and liabilities assumed and calculation of goodwill for TAG utilizing the information at acquisition date. All numbers are in 000s except shares and warrants.

Assets acquired:
Current assets	$	152
Property and equipment		35
Customer, workforce, trademarks and related relationships		3,834
Goodwill		457
Total assets acquired		4,478
Total liabilities assumed		(222	)
Net assets acquired	$	4,256
Consideration paid:
Issuance of 600,000 shares of common stock	$	2,580
Issuance of 1,600,000 warrants		1,676
Total	$	4,256

The Company is amortizing the intangible assets over their useful lives of 5-10 years. During the three months ended March 31, 2018, the Company recorded amortization expense of $82,066.

Note F – Segments

We had two operating segments, one that sells the ECOWIN products under the “Vegalab” brand name and a produce packaging business conducted under the name M&G Packing, Inc. located in Tulare County, California that was acquired in the 4^th quarter of 2017. Prior to the acquisition, the Company’s only business segment was Vegalab.

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For the three months ended March 31, 2018:

					Segment		Segment
Business Segment	Sales		Depreciation		Gross Profit		Assets
Produce packaging business	$	4,559,488	$	33,098	$	208,552	$	2,546,801
ECOWIN product sales	$	2,729,141	$	4,962	$	1,383,976	$	6,996,903
Total	$	7,288,629	$	38,060	$	1,592,528	$	9,543,704

Note G - Related Party Transactions

The Company’s current sole source of supply of ECOWIN products is through Vegalab S. A., a Swiss company solely owned by David Selakovic, the Company’s controlling shareholder. All products are sold to the Company at VSA's cost for the products from the manufacturer. During the three months ended March 31, 2018 and 2017, the Company incurred $879,006 and $244,000 for product purchases for resale from Vegalab S. A.

As of March 31, 2018 and December 31, 2017, the Company had outstanding accounts payable – related party of $719,272 and $712,947, respectively, for purchases of inventory.

Note H - Note Payable to Investor

On August 24, 2016, the Company’s controlling stockholder, David Selakovic, agreed to loan the Company up to $300,000 at a rate of 4% per annum. As of December 31, 2016, Mr. Selakovic loaned the Company a total of $175,000, due on 60 days demand. During the year ended December 31, 2017, the Company repaid $177,474 including accrued interest of $2,474. The Company recorded accrued interest of $1,894 and $1,894 as of March 31, 2018 and December 31, 2017, respectively, related to this note.

Note I - Common Stock Transactions

On December 29, 2017, Vegalab exercised an option to purchase The Agronomy Group LLC, a California limited liability company (“TAG”). On January 22, 2018, Vegalab and TAG entered into a Member Units Purchase Agreement under which Vegalab agreed to purchase all of the member units in TAG from its two members for a total of 600,000 shares of the common stock of Vegalab, valued at $4.30 per share, and warrants to purchase 1,600,000 shares of the common stock of Vegalab at an exercise price of $1.20 per share exercisable over a term of five years, valued at $1.05 per warrant. The acquisition was closed February 20, 2018, effective February 1, 2018.

On January 26, 2018, the Company issued 25,000 shares of common stock to M&G Farms, Inc., which was credited as a payment of $75,000 of principal and interest on the promissory note from the Company to M&G Farms from the Company to M&G Farms in the principal amount of $425,000 dated October 9, 2017.

12

Note J – Stock Options and Warrants

	Number of Options/Warrants		Weighted Average Exercise Price
Balance at December 31, 2017		448,000	$	1.45
Granted		1,600,000		1.20
Exercised		—		—
Expired		—		—
Balance at March 31, 2018		2,048,000	$	1.25
Options Exercisable at March 31, 2018		1,999,250	$	1.25

On November 6, 2017, the Company filed an amendment to its Articles of Incorporation with the Secretary of Nevada to change its name to "Vegalab, Inc." and approved the Company's 2017 Equity Incentive Plan and the reservation of 2,000,000 shares of common stock for the issuance thereunder. The name change and the 2017 Equity Incentive Plan were previously approved by its majority shareholders via a special meeting held on November 6, 2017.

The Company's stock price was higher than the weighted average exercise price at March 31, 2018; therefore the intrinsic value of the options and warrants was approximately $3,369,000.

On February 28, 2017, the Company granted options to purchase 30,000 shares of its common stock to consultants at an exercise price of $1.23 per share. The options vested over 10 months. The options expire on February 25, 2022. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 508%, risk free interest rate of 2.09%, and an expected life of 5 years. The intrinsic value of the option was approximately $50,000 as of March 31, 2018.

On November 20, 2017, the Company granted options to purchase 78,000 shares of its common stock to consultants at an exercise price of $1.425 per share. The options vest over 12 months. The options expire on November 20, 2022. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 490%, risk free interest rate of 2.09%, and an expected life of 5 years. The intrinsic value of the option was approximately $115,000 as of March 31, 2018.

On November 20, 2017, the Company granted options to purchase 100,000 shares of its common stock to an employee at an exercise price of $1.425 per share. The options vested immediately. The options expire on November 20, 2022. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 490%, risk free interest rate of 2.09%, and an expected life of 5 years. The intrinsic value of the option was approximately $147,000 as of March 31, 2018.

On November 20, 2017, the Company granted options to purchase 100,000 shares of its common stock to its President who is also a Director at an exercise price of $1.425 per share. The options vested immediately. The options expire on November 20, 2022. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 490%, risk free interest rate of 2.09%, and an expected life of 5 years. The intrinsic value of the option was approximately $147,000 as of March 31, 2018.

On December 11, 2017, the Company granted options to purchase 140,000 shares of its common stock to consultants at an exercise price of $1.40 per share. The options vested immediately. The options expire on December 12, 2022. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 495%, risk free interest rate of 2.16%, and an expected life of 5 years. The intrinsic value of the option was approximately $189,000 as of March 31, 2018.

On December 29, 2017, Vegalab exercised an option to purchase The Agronomy Group LLC, a California limited liability company (“TAG”). On January 22, 2018, Vegalab and TAG entered into a Member Units Purchase Agreement under which Vegalab agreed to purchase all of the member units in TAG from its two members for a total of 600,000 shares of the common stock of Vegalab, and warrants to purchase 1,600,000 shares of the common stock of Vegalab at an exercise price of $1.20 per share exercisable over a term of five years. The acquisition was closed February 20, 2018, effective February 1, 2018. The options vested immediately. The options expire on March 1, 2023. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 245%, risk free interest rate of 2.53%, and an expected life of 5 years. The total value of the warrant was approximately $1,676,000 at the February 1, 2018. As of March 31, 2018, the intrinsic value of the warrant was approximately $2,720,000.

13

During the three months ended March 31, 2018, we incurred stock option expense of $27,293.

Note K – Commitment and Contingencies 

On October 20, 2017, the Company entered into a lease agreement for a forklift with a lease term of 57 months at a current cost of $380 per month. Per the agreement, no payment was due in the first 4 months of the lease term. The Company recorded the lease as a capital lease and used its incremental borrowing rate of 1.90% for purposes of discounting lease payments.

The future minimum lease payments required under the capital lease and the present value of the net minimum lease payments as of March 31, 2018 are as follows:

2018	$	3,044
2019		4,555
2020		4,555
2021		4,555
2022 & Thereafter		5,315
Total future minimum lease payments	$	22,024
Less: amount representing interest		(380	)
Present value of net minimum lease and obligations		21,644

On July 20, 2016, the Company entered into a lease agreement for warehouses located at 2542 Business Parkway Suite 1 and 2, Minden, Nevada. The facility is 24,276 square feet with a lease term of 36 months at a current cost of $13,959 per month. The Company was also required to make a security deposit of $14,500. During the three months ended March 31, 2018, the Company incurred rent expense of $50,501.

On February 13, 2018, the Company entered into a lease agreement for office space located at 764 P Street Suite 014,015,016 and 017, Fresno California. The office is 2,850 square feet with a lease term of 12 months commencing on March 1, 2018 at a current cost of $3,000 per month. The Company was also required to make a security deposit of $3,000. During the three months ended March 31, 2018, the Company incurred rent expense of $3,250.

At March 31, 2018, future minimum obligations on leases are:

2018	$	152,628
2019		131,628
2020		-
2021		-
2022 & Thereafter		-
Total	$	284,256

14

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

Caution Regarding Forward-Looking Information

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the audited December 31, 2017 Consolidated Financial Statements and notes thereto, along with Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2017 Annual Report on Form 10-K, filed separately with the Securities and Exchange Commission.

This document contains statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, which address activities, actions, goals, prospects, or new developments that we expect or anticipate will or may occur in the future, including such things as expansion and growth of our operations and other such matters are forward-looking statements. Any one or a combination of factors could materially affect our operations and financial condition. These factors include competitive pressures, success or failure of marketing programs, changes in pricing and availability of products offered to customers, legal and regulatory initiatives affecting our products, and conditions in the capital markets. Forward-looking statements made by us are based on knowledge of our business and the environment in which we operate as of the date of this report. Because of the factors discussed in our 2017 Annual Report on Form 10-K and factors disclosed in subsequent reports filed with the Securities and Exchange Commission, actual results may differ from those in the forward-looking statements.

General

Vegalab, Inc., formerly HPC Acquisitions, Inc. (the “Company”, “we”, “our”, or “us”) is the exclusive North and South America distributor of Vegalab products supplied by Vegalab SA, Switzerland (“VSA”). 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. 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.

Vegalab products consist of biological pesticides, fertilizers, and specialty biological agents that are highly effective against targeted organisms, non-toxic to beneficial organisms, and safe for the environment. The Company holds registrations for its products in a number of US states, Costa Rica, and Panama, and is pursuing additional registrations domestically and in Canada, Mexico, and Central/ South America.

Recent Development

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. The purchase price for TAG was paid by the delivery of 600,000 shares of common stock of Vegalab, and a warrant to purchase 1,600,000 shares of common stock of Vegalab at an exercise price of $1.20 per share exercisable over a term of five years.

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. Cost of goods sold were $1,345,165 for the three months ended March 31, 2018, compared to $189,451 for the three months ended March 31, 2017.

15

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 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. 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. For the three months ended March 31, 2018, we had a loss from operations of $49,404 compared to $239,870 for 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.

Liquidity and Capital Resources

At March 31, 2018, and December 31, 2017, the Company had a working capital surplus of approximately $1,789,607 and $1,960,567, respectively.

We believe our current funding is sufficient to meet our needs described above over the next 9 to 12 months. Nevertheless, our goal is to begin and then increase product sales as quickly as we can within the constraints of our managerial and financial resources. If sales opportunities exceed our expectations, we will need additional debt or equity financing to seize these opportunities and there is no assurance financing will be available or available at terms we would find acceptable. If we are unable to raise additional capital at a level adequate to support our sales opportunities, we would need to curtail marketing efforts, which would adversely affect growth and results of operations and could prevent us from succeeding in implementing our new operating business. These factors raise substantial doubt about the Company’s ability to continue to operate as a going concern for the 12 months following the issuance date of these consolidated financial statements.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods. The more critical accounting estimates include estimates related to revenue recognition and accounts receivable allowances. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described in Note D to our unaudited financial statements appearing elsewhere in this report.

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

Not required of a smaller reporting company.

Item 4 - Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15 promulgated under the Exchange Act as of the end of the period covered by this report on Form 10-Q. Disclosure controls and procedures are controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and include controls and procedures designed to ensure that information we are required to disclose in such reports is accumulated and communicated to management, including our Certifying Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon that evaluation, our Certifying Officer concluded that as of such date, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in our reports is recorded, processed, summarized and reported within the time periods specified by the SEC due to certain weaknesses in our internal control over financial reporting described in Item 9A of our Annual Report on Form 10-K for the year ended March 31, 2017, which we view as an integral part of our disclosure controls and procedures.

16

There have been no changes in our internal control over financial reporting during the quarterly period ended March 31, 2018, which have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Part II - Other Information

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

On January 26, 2018, the Company issued 25,000 shares of common stock to M&G Farms, Inc., which was credited as a payment of $75,000 of principal and interest on the promissory note from the Company to M&G Farms from the Company to M&G Farms in the principal amount of $425,000 dated October 9, 2017.

On December 29, 2017, the Vegalab exercised an option to purchase The Agronomy Group LLC, a California limited liability company (“TAG”). On January 22, 2018, Vegalab and TAG entered into a Member Units Purchase Agreement under which Vegalab agreed to purchase all of the member units in TAG from its two members for a total of 600,000 shares of the common stock of Vegalab, and warrants to purchase 1,600,000 shares of the common stock of Vegalab at an exercise price of $1.20 per share exercisable over a term of five years. The acquisition was closed February 20, 2018, effective February 1, 2018.

The shares of common stock, options, warrants, and common stock underlying the options and warrants are issued in reliance on the exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended.

Item 6 - Exhibits

Exhibit No.
10.1	Member Units Purchase Agreement dated January 22, 2018 (1)
10.2	Common Stock Purchase Warrant issued to Jeffry Hill (1)
10.3	Common Stock Purchase Warrant issued to Ryan Sweeney(1)
10.4	Employment Agreement between Vegalab, Inc., and Jeffry Hill (1)
10.5	Employment Agreement between Vegalab, Inc., and Ryan Sweeney (1)
31.1	Certification pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002
101	Interactive data files pursuant to Rule 405 of Regulation S-T.

(1)       These exhibits are incorporated herein by this reference form the Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2018.

17

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Vegalab, Inc.
Dated: July 13, 2018	By:	/s/ David D. Selakovic
		David D. Selakovic, Chief Executive Officer and Chief Financial Officer

18

EX-31

Exhibit No. 31.1

Certification

I, David D. Selakovic, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Vegalab, Inc. for the period ended March 31, 2018;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: July 13, 2018	By:	/s/ David D. Selakovic
		David D. Selakovic, Chief Executive Officer and Chief Financial Officer

EX-32

Exhibit No. 32.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Vegalab, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) I, David D. Selakovic, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 13, 2018	By:	/s/ David D. Selakovic
		David D. Selakovic, Chief Executive Officer and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Vegalab, Inc. and will be retained by Vegalab, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certificate is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as a part of the Report or as a separate disclosure document.

XML

Document And Entity Information	3 Months Ended
	Mar. 31, 2018 shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Entity Registrant Name	Vegalab, Inc.
Entity Central Index Key	0001435224
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	VEGL
Entity Common Stock, Shares Outstanding	23,787,897

XML

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2018	Dec. 31, 2017
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	0
Goodwill	457,407	0
Deposits	0	14,500
Total assets	9,543,704	4,787,476
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	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	0	0
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

XML

Condensed Consolidated Balance Sheets [Parenthetical] - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	50,000,000	50,000,000
Common Stock, Shares Issued	23,787,897	23,162,897
Common Stock, Shares Outstanding	23,787,897	23,162,897

XML

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenues:
Processing revenue	$ 4,559,488	$ 0
Product sales	2,729,141	208,816
Total Revenue	7,288,629	208,816
Cost of Goods Sold:
Cost of processing	4,350,936	0
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	0	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

XML

Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 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	0
Loss on disposition of fixed assets	14,502	0
Amortization expense	82,066	0
Stock option expense	27,295	0
(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	0
Accrued income taxes	0	(17,036)
Accrued interest payable to controlling stockholder	0	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	0
Purchase of fixed assets	(219,440)	0
Net cash used in investing activities	(196,446)	0
Cash flows from financing activities
Cash paid on notes payable to controlling stockholder, net	0	(31,244)
Payment for capital leases	(501)	0
Proceeds from sale of common stock	0	230,600
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	0	0
Non-cash investing and financing activities
Common equity issued for acquisition of business	4,256,000	0
Common stock issued for conversion of note payable	$ 75,000	$ 0

XML

Organization and Description of Business

3 Months Ended

Mar. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations [Text Block]

Note A - Organization and Description of Business

Vegalab Inc. (formerly HPC Acquisitions, Inc.) (the “Company”) was initially formed under the laws of the State of Minnesota as Herky Packing Co. on July 17, 1968. The Company initially produced and marketed meat snack foods, principally beef jerky, smoked dried beef and snack sausages, through food brokers, distributors and wagon jobbers. Despite a 1970 restructuring, including the relocation to an approximate 12,500 square foot production facility, the Company’s efforts were unsuccessful and all operations were terminated by the end of 1970. On April 10, 1972, the Company changed its corporate name to H. P. C. Incorporated. In connection with this name change, the Company acquired Ed Stein’s Tire Center, Inc., a Minneapolis, Minnesota-based distributor of Gates tires. This acquisition was unsuccessful and reversed in 1973.

On August 7, 2006, the Company changed its state of incorporation from Minnesota to Nevada by means of a merger with and into HPC Acquisitions, Inc., a Nevada corporation formed on June 12, 2006 solely for the purpose of effecting the reincorporation. The Articles of Incorporation and Bylaws of the Nevada Corporation are the Articles of Incorporation and Bylaws of the surviving corporation. Such Articles of Incorporation modified the Company’s capital structure to allow for the issuance of up to 50,000,000 shares of $0.001 par value common stock and up to 10,000,000 shares of $0.001 par value preferred stock.

On March 8, 2016, the Company sold 12,011,000 shares of its common stock to David Selakovic for a total cash purchase price of $303,100. This transaction effected a change in management and control of the Company. Mr. Selakovic assigned to the Company certain assets consisting of the exclusive right to distribute in the Western Hemisphere natural agrochemicals developed by ECOWIN Co., Ltd., a Korean company, certain state permits for the sale of ECOWIN agrochemicals, and the trademark “Vegalab” (the “DS Assets”).Our new plan of operation is to commence the business of selling ECOWIN products under the brand name “Vegalab” and the business of selling citrus products under the brand name “M&G”.

The Company is currently in the business of selling the ECOWIN products under the “Vegalab” name in the United States of America. The Company’s current sole source of supply of ECOWIN products is through Vegalab S. A., a Swiss company solely owned by David Selakovic, the Company’s controlling shareholder and sole officer and director.

On October 18, 2017, the Company purchased substantially all the assets of a produce packaging business conducted under the name M&G Packing, Inc. located in Tulare County, California. The acquisition consisted of purchasing the real property and building used in the business from M & G Farms, Inc., a California corporation, and all of the equipment, inventory, customers, suppliers, contract rights, and intangible property from M&G Packing, Inc., a California corporation.

On November 6, 2017, the Company amended its Articles of Incorporation to change its name to Vegalab, Inc.

On December 29, 2017, Vegalab exercised an option to purchase The Agronomy Group LLC, a California limited liability company (“TAG”). On January 22, 2018, Vegalab and TAG entered into a Member Units Purchase Agreement under which Vegalab agreed to purchase all of the member units in TAG from its two members for a total of 600,000 shares of common stock of Vegalab, and warrants to purchase 1,600,000 shares of the common stock of Vegalab at an exercise price of $1.20 per share exercisable over a term of five years. The acquisition was closed February 20, 2018, effective February 1, 2018.

XML

Preparation of Financial Statements

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

Note B - Preparation of Financial Statements

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles and has a fiscal year-end of December 31.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

During interim periods, the Company follows the accounting policies set forth in its annual audited financial statements filed with the U. S. Securities and Exchange Commission on its Annual Report on Form 10-K for the year ended December 31, 2017.

In the opinion of management, the accompanying interim financial statements, prepared in accordance with the U.S. Securities and Exchange Commission’s instructions for Form 10-Q, should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report filed with the SEC on Form10-K for the year ended December 31, 2017, and are unaudited and contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations and cash flows of the Company for the respective interim periods presented. The current period results of operations are not necessarily indicative of results which ultimately will be reported for the full fiscal year ending December 31, 2017.

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Going Concern Uncertainty

3 Months Ended

Mar. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Substantial Doubt about Going Concern [Text Block]

Note C - Going Concern Uncertainty

The Company’s principal business plan is to distribute, in the Western Hemisphere, certain natural agrochemicals developed by ECOWIN Co., Ltd., a Korean company, under the brand name “Vegalab”. The Company also operates a produce packaging business. However, there is no assurance that the Company will be able to successfully penetrate its targeted markets or implement its business plan.

The Company's continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis. The Company faces considerable risk in its business plan. If insufficient operating capital is available during the next twelve months, the Company will be forced to rely on existing cash in the bank and additional funds loaned by management and/or significant stockholders.

The Company’s former majority stockholder previously provided the necessary working capital to maintain the corporate status of the Company. It is the current intent of management and significant stockholders to provide sufficient working capital, if necessary, to support and preserve the integrity of the corporate entity. However, no formal commitments or arrangements to advance or loan funds to the Company or repay any such advances or loans exist. There is no legal obligation for either management or significant stockholders to provide additional future funding.

The Company anticipates offering future sales of equity securities. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.

The Company’s certificate of incorporation authorizes the issuance of up to 10,000,000 shares of preferred stock and 50,000,000 shares of common stock. The Company’s ability to issue preferred stock may limit the Company’s ability to obtain debt or equity financing as well as impede potential takeover of the Company, which takeover may be in the best interest of stockholders. The Company’s ability to issue these authorized but unissued securities may also negatively impact our ability to raise additional capital through the sale of our debt or equity securities.

In such a restricted cash flow scenario, the Company would be unable to complete its business plan steps, and would, instead, delay all cash intensive activities. Without necessary cash flow, the Company may become dormant during the next twelve months, or until such time as necessary funds could be raised in the equity securities market.

While the Company is of the opinion that good faith estimates of the Company’s ability to secure additional capital in the future to reach its goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps. These factors raise substantial doubt about the Company’s ability to continue to operate as a going concern for the twelve months following the issuance date of these consolidated financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Note D - Summary of Significant Accounting Policies 

1. Principle of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Vegalab, Inc. and its wholly owned subsidiaries, M&G Packaging Inc, and The Agronomy Group LLC. All intercompany accounts have been eliminated in the consolidation.

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim information and with the instructions to Form 10-Q and Regulation S-K. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments consisting of a normal and recurring nature considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2018 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2018.

2. Cash and Cash Equivalents

The Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

2. Concentrations of Credit Risk

Sales to three customers comprised 46%, 31% and 22% of the Company's product sales revenues for the three months ended March 31, 2018. the one customer accounted for 92%  accounts receivable as of March 31, 2018.

Sales to three customers comprised 29%, 12% and 12% of the Company's processing revenues for the three months ended March 31, 2018. Four customers accounted of 68% or 20%, 19%, 18% and 11% of accounts receivable as of March 31, 2018. Sales to two customers comprised 60% and 28% of the Company’s total revenues for the Three months ended March 31, 2017. Two customers accounted for 78% and 8% of accounts receivable, respectively, as of December 31, 2017. The Company believes that, in the event that its primary customers are unable or unwilling to continue to purchase the Company’s goods, there are a number of alternative customers at comparable prices.

3. Accounts Receivable

In the normal course of business, the Company extends unsecured credit to virtually all of its customers which are located throughout the United States. Because of the credit risk involved, management has provided an allowance for doubtful accounts which reflects its opinion of amounts which will eventually become uncollectible. In the event of complete non-performance, the maximum exposure to the Company is the recorded amount of trade accounts receivable shown on the balance sheet at the date of non-performance. March 31, 2018 and December 31, 2017, the Company recorded allowances of $9,154 and $2,915, respectively, for doubtful accounts from certain sales that occurred but not assessed to be collectible.

  

4. Inventory

Inventory consists of finished goods related to the sale of certain natural agrochemicals developed by ECOWIN Co., Ltd., a Korean company, under the brand name “Vegalab”. Inventory is valued at the lower of cost or market using the average cost method. A change in income is taken when factors that would result in a need for a reduction in the valuation, such as excess or obsolete inventory, are noted. At March 31, 2018 and December 31, 2017, there was no reserve for excess or obsolete inventory. M&G Farms from time to time holds customer’s inventory on a consignment basis until it is sold. As of March 31, 2018 there was no consignment inventory held by the Company.

5. Property, plant and equipment

Property, plant and equipment are recorded at cost, net of accumulated depreciation. Depreciation is calculated by using the straight-line method over the estimated useful lives of the assets, excluding lands, which is five years for all categories and ten years for buildings.

Automobile, computer equipment, and leasehold improvements consisted of the following:

	March 31, 2018		December 31, 2017
Automobile	$	14,261	$	14,261
Land		141,000		142,475
Building		199,338		374,338
Machinery and equipment		749,468		490,791
Total		1,104,067		1,021,865
Impairment recognized upon acquisition		-		(179,452)
Impairment recognized subsequent to acquisition		-		(729)
Accumulated depreciation		(80,603)		(20,362)
Balance at the end of period	$	1,023,464	$	821,322

Depreciation expense for the three months ended March 31, 2018 and 2017 was $38,060 and $0, respectively.

 

6. Note Payable

On October 18, 2017, the Company purchased substantially all the assets of a produce packaging business conducted under the name M&G Packing, Inc. located in Tulare County, California. The total purchase price for the business plus closing costs was $854,452, which was paid $429,452 in cash and $425,000 in the form of a promissory note secured by the real property that bears interest at the rate of 6.0% per annum with interest only payable monthly and all principal and interest due 18 months from the close of escrow on October 24, 2017. On January 26, 2018, the Company issued 25,000 shares of common stock to M&G Farms, Inc., which was credited as a payment of $75,000 of principal and interest on the promissory note from the Company to M&G Farms from the Company to M&G Farms.

7. Revenue Recognition

Revenue is recognized when the earnings process is completed, the risks and rewards of ownership have transferred to the customer, which is generally the same day as delivery or shipment of the product, the price to the buyer is fixed or determinable, and collection is reasonably assured. All sales are recorded when the goods are shipped.

The Company ships all product and fruit on an FOB-Plant, “as-is” basis. Accordingly, revenue is recognized by the Company at the point at which an order is shipped at a fixed price, collection is reasonably assured and the Company has no remaining performance obligations related to the sale. The Company sells all products and fruit with “no right of return” by the purchaser for any factor other than defects in the products.

8. Income (Loss) per Share

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).

Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.

For the three months ended March 31, 2018 and 2017, the Company’s potentially dilutive shares, which include outstanding common stock options that have not been included in the computation of diluted net loss per share as the result would have been anti-dilutive.

	March 31, 2018		December 31, 2017
Options		448,000		448,000
Warrants		1,600,000
Total		2,048,000		448,000

9. Amortization and Impairment of Long-Lived Assets

Amortization and impairment of long-lived assets are non-cash expenses relating primarily to non-compete agreements and trademarks website acquisitions. The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10, "Accounting for the Impairment or Disposal of Long-Lived Assets". This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Non-compete provisions are amortized over five years and trademark and other intangibles are amortized over 10 years. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

10. Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments in this Update are intended render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In April 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” ASU 2016 - provides guidance regarding the classification of certain items within the statement of cash flows.  ASU 2016-15 is effective for annual periods beginning after December 15, 2017, with early adoption permitted.  The Company does not believe this ASU will have an impact on our results of operation, cash flows, other than presentation, or financial condition.

On November 17, 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”, a consensus of the FASB’s Emerging Issues Task Force (the “Task Force”). The new standard requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. ASU No. 2016-18 is effective for public business entities for fiscal years beginning after December 15, 2017. The Company does not believe this ASU will have an impact on our results of operation, cash flows, other than presentation, or financial condition.

The Company does not expect the adoption of other recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flows.

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Acquisition of Business

3 Months Ended

Mar. 31, 2018

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Note E – Acquisition of Business

On December 29, 2017, Vegalab exercised an option to purchase The Agronomy Group LLC, a California limited liability company (“TAG”). On January 22, 2018, Vegalab and TAG entered into a Member Units Purchase Agreement under which Vegalab agreed to purchase all of the member units in TAG from its two members for a total of 600,000 shares of the common stock of Vegalab, and warrants to purchase 1,600,000 shares of the common stock of Vegalab at an exercise price of $1.20 per share exercisable over a term of five years. The acquisition was closed February 20, 2018, effective February 1, 2018. The Company recognized the assets acquired and liabilities assumed from TAG at their fair value on the acquisition date, and the excess in purchase price over these values it was allocated to intangible assets and goodwill. The estimated fair values of assets acquired and liabilities assumed, were determined based on management’s best estimates. Preliminary estimated fair values are subject to measurement period adjustments which represent updates made to the preliminary purchase price allocation based on revisions to valuation estimates in the interim period subsequent to the acquisition and initial accounting date up until the purchase price allocation is finalized which cannot be any later than one year from the acquisition date. The Company engaged a third-party valuation specialist to assist in the valuation and is in the process of completing its assessment of the fair value of assets acquired and liabilities assumed. Thus the preliminary measurement of the assets acquired and liabilities assumed are subject to change, which could be significant. The Company will finalize the amounts recognized no later than one year from the acquisition date.

The following table shows the preliminary purchase price, estimated acquisition-date fair values of the assets acquired and liabilities assumed and calculation of goodwill for TAG utilizing the information at acquisition date. All numbers are in 000s except shares and warrants.

Assets acquired:
Current assets	$	152
Property and equipment		35
Customer, workforce, trademarks and related relationships		3,834
Goodwill		457
Total assets acquired		4,478
Total liabilities assumed		(222)
Net assets acquired	$	4,256
Consideration paid:
Issuance of 600,000 shares of common stock	$	2,580
Issuance of 1,600,000 warrants		1,676
Total	$	4,256

The Company is amortizing the intangible assets over their useful lives of 5-10 years. During the three months ended March 31, 2018, the Company recorded amortization expense of $82,066.

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Segments

3 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note F – Segments

We had two operating segments, one that sells the ECOWIN products under the “Vegalab” brand name and a produce packaging business conducted under the name M&G Packing, Inc. located in Tulare County, California that was acquired in the 4^th quarter of 2017. Prior to the acquisition, the Company’s only business segment was Vegalab.

For the three months ended March 31, 2018:

					Segment		Segment
Business Segment	Sales		Depreciation		Gross Profit		Assets
Produce packaging business	$	4,559,488	$	33,098	$	208,552	$	2,546,801
ECOWIN product sales	$	2,729,141	$	4,962	$	1,383,976	$	6,996,903
Total	$	7,288,629	$	38,060	$	1,592,528	$	9,543,704

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Related Party Transactions

3 Months Ended

Mar. 31, 2018

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Note G - Related Party Transactions

The Company’s current sole source of supply of ECOWIN products is through Vegalab S. A., a Swiss company solely owned by David Selakovic, the Company’s controlling shareholder. All products are sold to the Company at VSA's cost for the products from the manufacturer. During the three months ended March 31, 2018 and 2017, the Company incurred $879,006 and $244,000 for product purchases for resale from Vegalab S. A.

As of March 31, 2018 and December 31, 2017, the Company had outstanding accounts payable – related party of $719,272 and $712,947, respectively, for purchases of inventory.

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Note Payable to Investor

3 Months Ended

Mar. 31, 2018

Notes Payable to Investors [Abstract]

Notes Payable to Investors Disclosure [Text Block]

Note H - Note Payable to Investor

On August 24, 2016, the Company’s controlling stockholder, David Selakovic, agreed to loan the Company up to $300,000 at a rate of 4% per annum. As of December 31, 2016, Mr. Selakovic loaned the Company a total of $175,000, due on 60 days demand. During the year ended December 31, 2017, the Company repaid $177,474 including accrued interest of $2,474. The Company recorded accrued interest of $1,894 and $1,894 as of March 31, 2018 and December 31, 2017, respectively, related to this note.

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Common Stock Transactions

3 Months Ended

Mar. 31, 2018

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note I - Common Stock Transactions

On December 29, 2017, Vegalab exercised an option to purchase The Agronomy Group LLC, a California limited liability company (“TAG”). On January 22, 2018, Vegalab and TAG entered into a Member Units Purchase Agreement under which Vegalab agreed to purchase all of the member units in TAG from its two members for a total of 600,000 shares of the common stock of Vegalab, valued at $4.30 per share, and warrants to purchase 1,600,000 shares of the common stock of Vegalab at an exercise price of $1.20 per share exercisable over a term of five years, valued at $1.05 per warrant. The acquisition was closed February 20, 2018, effective February 1, 2018.

On January 26, 2018, the Company issued 25,000 shares of common stock to M&G Farms, Inc., which was credited as a payment of $75,000 of principal and interest on the promissory note from the Company to M&G Farms from the Company to M&G Farms in the principal amount of $425,000 dated October 9, 2017.

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Stock Options and Warrants

3 Months Ended

Mar. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note J – Stock Options and Warrants

	Number of Options/Warrants		Weighted Average Exercise Price
Balance at December 31, 2017		448,000	$	1.45
Granted		1,600,000		1.20
Exercised		—		—
Expired		—		—
Balance at March 31, 2018		2,048,000	$	1.25
Options Exercisable at March 31, 2018		1,999,250	$	1.25

On November 6, 2017, the Company filed an amendment to its Articles of Incorporation with the Secretary of Nevada to change its name to "Vegalab, Inc." and approved the Company's 2017 Equity Incentive Plan and the reservation of 2,000,000 shares of common stock for the issuance thereunder. The name change and the 2017 Equity Incentive Plan were previously approved by its majority shareholders via a special meeting held on November 6, 2017.

 

The Company's stock price was higher than the weighted average exercise price at March 31, 2018; therefore the intrinsic value of the options and warrants was approximately $3,369,000.

 

On February 28, 2017, the Company granted options to purchase 30,000 shares of its common stock to consultants at an exercise price of $1.23 per share. The options vested over 10 months. The options expire on February 25, 2022. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 508%, risk free interest rate of 2.09%, and an expected life of 5 years. The intrinsic value of the option was approximately $50,000 as of March 31, 2018.

 

On November 20, 2017, the Company granted options to purchase 78,000 shares of its common stock to consultants at an exercise price of $1.425 per share. The options vest over 12 months. The options expire on November 20, 2022. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 490%, risk free interest rate of 2.09%, and an expected life of 5 years. The intrinsic value of the option was approximately $115,000 as of March 31, 2018.

 

On November 20, 2017, the Company granted options to purchase 100,000 shares of its common stock to an employee at an exercise price of $1.425 per share. The options vested immediately. The options expire on November 20, 2022. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 490%, risk free interest rate of 2.09%, and an expected life of 5 years. The intrinsic value of the option was approximately $147,000 as of March 31, 2018.

On November 20, 2017, the Company granted options to purchase 100,000 shares of its common stock to its President who is also a Director at an exercise price of $1.425 per share. The options vested immediately. The options expire on November 20, 2022. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 490%, risk free interest rate of 2.09%, and an expected life of 5 years. The intrinsic value of the option was approximately $147,000 as of March 31, 2018.

 

On December 11, 2017, the Company granted options to purchase 140,000 shares of its common stock to consultants at an exercise price of $1.40 per share. The options vested immediately. The options expire on December 12, 2022. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 495%, risk free interest rate of 2.16%, and an expected life of 5 years. The intrinsic value of the option was approximately $189,000 as of March 31, 2018.

 

On December 29, 2017, Vegalab exercised an option to purchase The Agronomy Group LLC, a California limited liability company (“TAG”). On January 22, 2018, Vegalab and TAG entered into a Member Units Purchase Agreement under which Vegalab agreed to purchase all of the member units in TAG from its two members for a total of 600,000 shares of the common stock of Vegalab, and warrants to purchase 1,600,000 shares of the common stock of Vegalab at an exercise price of $1.20 per share exercisable over a term of five years. The acquisition was closed February 20, 2018, effective February 1, 2018. The options vested immediately. The options expire on March 1, 2023. The options were valued using the Black Scholes Option Pricing Model with the following assumptions: dividend yield of 0%, annual volatility of 245%, risk free interest rate of 2.53%, and an expected life of 5 years. The total value of the warrant was approximately $1,676,000 at the February 1, 2018. As of March 31, 2018, the intrinsic value of the warrant was approximately $2,720,000.

During the three months ended March 31, 2018, we incurred stock option expense of $27,293.

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Commitment and Contingencies

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note K – Commitment and Contingencies 

On October 20, 2017, the Company entered into a lease agreement for a forklift with a lease term of 57 months at a current cost of $380 per month. Per the agreement, no payment was due in the first 4 months of the lease term. The Company recorded the lease as a capital lease and used its incremental borrowing rate of 1.90% for purposes of discounting lease payments.

 

The future minimum lease payments required under the capital lease and the present value of the net minimum lease payments as of March 31, 2018 are as follows:

2018	$	3,044
2019		4,555
2020		4,555
2021		4,555
2022 & Thereafter		5,315
Total future minimum lease payments	$	22,024
Less: amount representing interest		(380)
Present value of net minimum lease and obligations		21,644

On July 20, 2016, the Company entered into a lease agreement for warehouses located at 2542 Business Parkway Suite 1 and 2, Minden, Nevada. The facility is 24,276 square feet with a lease term of 36 months at a current cost of $13,959 per month. The Company was also required to make a security deposit of $14,500. During the three months ended March 31, 2018, the Company incurred rent expense of $50,501.

 

On February 13, 2018, the Company entered into a lease agreement for office space located at 764 P Street Suite 014,015,016 and 017, Fresno California. The office is 2,850 square feet with a lease term of 12 months commencing on March 1, 2018 at a current cost of $3,000 per month. The Company was also required to make a security deposit of $3,000. During the three months ended March 31, 2018, the Company incurred rent expense of $3,250.

At March 31, 2018, future minimum obligations on leases are:

2018	$	152,628
2019		131,628
2020		-
2021		-
2022 & Thereafter		-
Total	$	284,256

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

1. Principle of consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Vegalab, Inc. and its wholly owned subsidiaries, M&G Packaging Inc, and The Agronomy Group LLC. All intercompany accounts have been eliminated in the consolidation.

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim information and with the instructions to Form 10-Q and Regulation S-K. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments consisting of a normal and recurring nature considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 2018 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2018.

Cash and Cash Equivalents, Policy [Policy Text Block]

2. Cash and Cash Equivalents

The Company considers all cash on hand and in banks, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

2. Concentrations of Credit Risk

Sales to three customers comprised 46%, 31% and 22% of the Company's product sales revenues for the three months ended March 31, 2018. the one customer accounted for 92%  accounts receivable as of March 31, 2018.

Sales to three customers comprised 29%, 12% and 12% of the Company's processing revenues for the three months ended March 31, 2018. Four customers accounted of 68% or 20%, 19%, 18% and 11% of accounts receivable as of March 31, 2018. Sales to two customers comprised 60% and 28% of the Company’s total revenues for the Three months ended March 31, 2017. Two customers accounted for 78% and 8% of accounts receivable, respectively, as of December 31, 2017. The Company believes that, in the event that its primary customers are unable or unwilling to continue to purchase the Company’s goods, there are a number of alternative customers at comparable prices.

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]

3. Accounts Receivable

In the normal course of business, the Company extends unsecured credit to virtually all of its customers which are located throughout the United States. Because of the credit risk involved, management has provided an allowance for doubtful accounts which reflects its opinion of amounts which will eventually become uncollectible. In the event of complete non-performance, the maximum exposure to the Company is the recorded amount of trade accounts receivable shown on the balance sheet at the date of non-performance. March 31, 2018 and December 31, 2017, the Company recorded allowances of $9,154 and $2,915, respectively, for doubtful accounts from certain sales that occurred but not assessed to be collectible.

Inventory, Policy [Policy Text Block]

4. Inventory

Inventory consists of finished goods related to the sale of certain natural agrochemicals developed by ECOWIN Co., Ltd., a Korean company, under the brand name “Vegalab”. Inventory is valued at the lower of cost or market using the average cost method. A change in income is taken when factors that would result in a need for a reduction in the valuation, such as excess or obsolete inventory, are noted. At March 31, 2018 and December 31, 2017, there was no reserve for excess or obsolete inventory. M&G Farms from time to time holds customer’s inventory on a consignment basis until it is sold. As of March 31, 2018 there was no consignment inventory held by the Company.

Property, Plant and Equipment, Policy [Policy Text Block]

5. Property, plant and equipment

Property, plant and equipment are recorded at cost, net of accumulated depreciation. Depreciation is calculated by using the straight-line method over the estimated useful lives of the assets, excluding lands, which is five years for all categories and ten years for buildings.

Automobile, computer equipment, and leasehold improvements consisted of the following:

	March 31, 2018		December 31, 2017
Automobile	$	14,261	$	14,261
Land		141,000		142,475
Building		199,338		374,338
Machinery and equipment		749,468		490,791
Total		1,104,067		1,021,865
Impairment recognized upon acquisition		-		(179,452)
Impairment recognized subsequent to acquisition		-		(729)
Accumulated depreciation		(80,603)		(20,362)
Balance at the end of period	$	1,023,464	$	821,322

Depreciation expense for the three months ended March 31, 2018 and 2017 was $38,060 and $0, respectively.

Notes Payable [Policy Text Block]

6. Note Payable

On October 18, 2017, the Company purchased substantially all the assets of a produce packaging business conducted under the name M&G Packing, Inc. located in Tulare County, California. The total purchase price for the business plus closing costs was $854,452, which was paid $429,452 in cash and $425,000 in the form of a promissory note secured by the real property that bears interest at the rate of 6.0% per annum with interest only payable monthly and all principal and interest due 18 months from the close of escrow on October 24, 2017. On January 26, 2018, the Company issued 25,000 shares of common stock to M&G Farms, Inc., which was credited as a payment of $75,000 of principal and interest on the promissory note from the Company to M&G Farms from the Company to M&G Farms.

Revenue Recognition, Policy [Policy Text Block]

7. Revenue Recognition

Revenue is recognized when the earnings process is completed, the risks and rewards of ownership have transferred to the customer, which is generally the same day as delivery or shipment of the product, the price to the buyer is fixed or determinable, and collection is reasonably assured. All sales are recorded when the goods are shipped.

The Company ships all product and fruit on an FOB-Plant, “as-is” basis. Accordingly, revenue is recognized by the Company at the point at which an order is shipped at a fixed price, collection is reasonably assured and the Company has no remaining performance obligations related to the sale. The Company sells all products and fruit with “no right of return” by the purchaser for any factor other than defects in the products.

Income (Loss) per share Policy [Policy Text Block]

8. Income (Loss) per Share

Basic earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the respective period presented in our accompanying financial statements.

Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants).

Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.

For the three months ended March 31, 2018 and 2017, the Company’s potentially dilutive shares, which include outstanding common stock options that have not been included in the computation of diluted net loss per share as the result would have been anti-dilutive.

	March 31, 2018		December 31, 2017
Options		448,000		448,000
Warrants		1,600,000
Total		2,048,000		448,000

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

9. Amortization and Impairment of Long-Lived Assets

Amortization and impairment of long-lived assets are non-cash expenses relating primarily to non-compete agreements and trademarks website acquisitions. The Company accounts for long-lived assets in accordance with the provisions of ASC 360-10, "Accounting for the Impairment or Disposal of Long-Lived Assets". This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Non-compete provisions are amortized over five years and trademark and other intangibles are amortized over 10 years. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

New Accounting Pronouncements, Policy [Policy Text Block]

10. Recent Accounting Pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases, which will amend current lease accounting to require lessees to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis, and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 does not significantly change lease accounting requirements applicable to lessors; however, certain changes were made to align, where necessary, lessor accounting with the lessee accounting model. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments in this Update are intended render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606. The Company is currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition.

In April 2016, the FASB issued ASU No. 2016-15, “Classification of Certain Cash Receipts and Cash Payments” ASU 2016 - provides guidance regarding the classification of certain items within the statement of cash flows.  ASU 2016-15 is effective for annual periods beginning after December 15, 2017, with early adoption permitted.  The Company does not believe this ASU will have an impact on our results of operation, cash flows, other than presentation, or financial condition.

On November 17, 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”, a consensus of the FASB’s Emerging Issues Task Force (the “Task Force”). The new standard requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities will also be required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. ASU No. 2016-18 is effective for public business entities for fiscal years beginning after December 15, 2017. The Company does not believe this ASU will have an impact on our results of operation, cash flows, other than presentation, or financial condition.

The Company does not expect the adoption of other recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flows.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2018

Accounting Policies [Abstract]

Property, Plant and Equipment [Table Text Block]

Automobile, computer equipment, and leasehold improvements consisted of the following:

	March 31, 2018		December 31, 2017
Automobile	$	14,261	$	14,261
Land		141,000		142,475
Building		199,338		374,338
Machinery and equipment		749,468		490,791
Total		1,104,067		1,021,865
Impairment recognized upon acquisition		-		(179,452)
Impairment recognized subsequent to acquisition		-		(729)
Accumulated depreciation		(80,603)		(20,362)
Balance at the end of period	$	1,023,464	$	821,322

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

For the three months ended March 31, 2018 and 2017, the Company’s potentially dilutive shares, which include outstanding common stock options that have not been included in the computation of diluted net loss per share as the result would have been anti-dilutive.

	March 31, 2018		December 31, 2017
Options		448,000		448,000
Warrants		1,600,000
Total		2,048,000		448,000

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Acquisition of Business (Tables)

3 Months Ended

Mar. 31, 2018

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The following table shows the preliminary purchase price, estimated acquisition-date fair values of the assets acquired and liabilities assumed and calculation of goodwill for TAG utilizing the information at acquisition date. All numbers are in 000s except shares and warrants.

Assets acquired:
Current assets	$	152
Property and equipment		35
Customer, workforce, trademarks and related relationships		3,834
Goodwill		457
Total assets acquired		4,478
Total liabilities assumed		(222)
Net assets acquired	$	4,256
Consideration paid:
Issuance of 600,000 shares of common stock	$	2,580
Issuance of 1,600,000 warrants		1,676
Total	$	4,256

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Segments (Tables)

3 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

For the three months ended March 31, 2018:

					Segment		Segment
Business Segment	Sales		Depreciation		Gross Profit		Assets
Produce packaging business	$	4,559,488	$	33,098	$	208,552	$	2,546,801
ECOWIN product sales	$	2,729,141	$	4,962	$	1,383,976	$	6,996,903
Total	$	7,288,629	$	38,060	$	1,592,528	$	9,543,704

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Stock Options and Warrants (Tables)

3 Months Ended

Mar. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

	Number of Options/Warrants		Weighted Average Exercise Price
Balance at December 31, 2017		448,000	$	1.45
Granted		1,600,000		1.20
Exercised		—		—
Expired		—		—
Balance at March 31, 2018		2,048,000	$	1.25
Options Exercisable at March 31, 2018		1,999,250	$	1.25

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Commitment and Contingencies (Tables)

3 Months Ended

Mar. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block]

The future minimum lease payments required under the capital lease and the present value of the net minimum lease payments as of March 31, 2018 are as follows:

2018	$	3,044
2019		4,555
2020		4,555
2021		4,555
2022 & Thereafter		5,315
Total future minimum lease payments	$	22,024
Less: amount representing interest		(380)
Present value of net minimum lease and obligations		21,644

Contractual Obligation, Fiscal Year Maturity Schedule [Table Text Block]

At March 31, 2018, future minimum obligations on leases are:

2018	$	152,628
2019		131,628
2020		-
2021		-
2022 & Thereafter		-
Total	$	284,256

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Organization and Description of Business (Details Textual)	Mar. 08, 2016 USD ($) shares	Mar. 31, 2018 ft² $ / shares shares	Jan. 22, 2018 $ / shares shares	Dec. 31, 2017 $ / shares shares	Aug. 07, 2006 $ / shares shares
Authorized Shares Common Stock		50,000,000		50,000,000	50,000,000
Common Stock Par Value Per Share | $ / shares		$ 0.001		$ 0.001	$ 0.001
Authorized Shares Preferred stock		10,000,000		10,000,000	10,000,000
Preferred Stock Par Value Per Share | $ / shares		$ 0.001		$ 0.001	$ 0.001
Area of Land | ft²		12,500
Units Shares Purchase			600,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			1,600,000
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares			$ 1.20
David Selakovic [Member]
Stock Issued During Period, Shares, New Issues	12,011,000
Stock Issued During Period, Value, New Issues | $	$ 303,100

XML

Going Concern Uncertainty (Details Textual) - shares	Mar. 31, 2018	Dec. 31, 2017	Aug. 07, 2006
Going Concern [Line Items]
Preferred Stock, Shares Authorized	10,000,000	10,000,000	10,000,000
Common Stock, Shares Authorized	50,000,000	50,000,000	50,000,000

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Summary of Significant Accounting Policies (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment, Gross	$ 1,104,067	$ 1,021,865
Impairment recognized upon acquisition	0	(179,452)
Impairment recognized subsequent to acquisition	0	(729)
Accumulated depreciation	(80,603)	(20,362)
Balance at the end of period	1,023,464	821,322
Auto mobile [Member]
Property, Plant and Equipment, Gross	14,261	14,261
Land [Member]
Property, Plant and Equipment, Gross	141,000	142,475
Building [Member]
Property, Plant and Equipment, Gross	199,338	374,338
Machinery and Equipment [Member]
Property, Plant and Equipment, Gross	$ 749,468	$ 490,791

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Summary of Significant Accounting Policies (Details 1) - shares	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,048,000	448,000
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	448,000	448,000
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,600,000

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Summary of Significant Accounting Policies (Details Textual) - USD ($)	1 Months Ended		3 Months Ended		12 Months Ended
	Jan. 26, 2018	Oct. 18, 2017	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage				68.00%
Depreciation			$ 38,060	$ 0
Allowance for Doubtful Accounts Receivable			$ 9,154		$ 2,915
Stock Issued During Period, Shares, Conversion of Convertible Securities	25,000
M&G Farms, Inc. [Member]
Significant Accounting Policies [Line Items]
Business Combination, Acquisition Related Costs		$ 854,452
Other Payments to Acquire Businesses		429,452
Debt Instrument, Face Amount		$ 425,000
Debt Instrument, Interest Rate, Stated Percentage		6.00%
Debt Instrument, Term		18 months
Stock Issued During Period, Shares, Conversion of Convertible Securities	25,000
Debt Conversion, Original Debt, Amount	$ 75,000
Noncompete Agreements [Member]
Significant Accounting Policies [Line Items]
Finite-Lived Intangible Asset, Useful Life			5 years
Trademark and Other Intangibles [Member]
Significant Accounting Policies [Line Items]
Finite-Lived Intangible Asset, Useful Life			10 years
Building [Member]
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life			10 years
Automobiles [Member]
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life			5 years
Machinery and Equipment [Member]
Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life			5 years
Customer One Concentration Risk [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			29.00%
Customer One Concentration Risk [Member] | Sales Revenue, Net [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			60.00%
Customer One Concentration Risk [Member] | Accounts Receivable [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			92.00%	20.00%	78.00%
Customer One Concentration Risk [Member] | Sales Revenue, Product Line [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			46.00%
Customer Two Concentration Risk [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			12.00%
Customer Two Concentration Risk [Member] | Sales Revenue, Net [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			28.00%
Customer Two Concentration Risk [Member] | Accounts Receivable [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage				19.00%	8.00%
Customer Two Concentration Risk [Member] | Sales Revenue, Product Line [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			31.00%
Customer Three Concentration Risk [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			12.00%
Customer Three Concentration Risk [Member] | Accounts Receivable [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage				18.00%
Customer Three Concentration Risk [Member] | Sales Revenue, Product Line [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			22.00%
Customer Four Concentration Risk [Member] | Accounts Receivable [Member]
Significant Accounting Policies [Line Items]
Concentration Risk, Percentage				11.00%

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Acquisition of Business (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Assets acquired:
Current assets	$ 152,000
Property and equipment	35,000
Customer, workforce, trademarks and related relationships	3,834,000
Goodwill	457,407	$ 0
Total assets acquired	4,478,000
Total liabilities assumed	(222,000)
Net assets acquired	4,256,000
Consideration paid:
Issuance of 600,000 shares of common stock	2,580,000
Issuance of 1,600,000 warrants	1,676,000
Total	$ 4,256,000

XML

Acquisition of Business (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Jan. 22, 2018
Units Shares Purchase			600,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			1,600,000
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 1.20
Amortization of Intangible Assets	$ 82,066	$ 0
Minimum [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	5 years
Maximum [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	10 years

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Segments (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Gross Profit:
Sales	$ 7,288,629	$ 208,816
Depreciation	38,060	0
Segment Gross Profit	1,592,528	$ 19,365
Segment Assets	9,543,704		$ 4,787,476
Produce Packaging Business [Member]
Gross Profit:
Sales	4,559,488
Depreciation	33,098
Segment Gross Profit	208,552
Segment Assets	2,546,801
ECOWIN Product Sales [Member]
Gross Profit:
Sales	2,729,141
Depreciation	4,962
Segment Gross Profit	1,383,976
Segment Assets	$ 6,996,903

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Related Party Transactions (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016
Notes Payable, Related Parties, Current				$ 175,000
Vegalab S. A [Member]
Related Party Transaction, Amounts of Transaction	$ 879,006	$ 244,000
Notes Payable, Related Parties, Current	$ 719,272		$ 712,947

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Note Payable to Investor (Details Textual) - USD ($)	1 Months Ended	12 Months Ended
	Aug. 24, 2016	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2018
Notes Payable, Related Parties, Current			$ 175,000
Accrued Interest Payable To Related Party ,Current		$ 1,894	$ 2,474	$ 1,894
Repayments of Subordinated Short-term Debt		$ 177,474
David Selakovic [Member]
Debt Instrument, Term			60 days
Debt Instrument, Interest Rate, Stated Percentage	4.00%
Proceeds from Related Party Debt	$ 300,000

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Common Stock Transactions (Details Textual) - USD ($)	1 Months Ended
	Jan. 26, 2018	Jan. 22, 2018	Dec. 29, 2017	Oct. 09, 2017
Share Price			$ 4.30
Units Shares Purchase		600,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		1,600,000
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 1.20
Warrant Price			$ 1.05
Stock Issued During Period, Shares, Conversion of Convertible Securities	25,000
Stock Issued During Period, Value, Conversion of Convertible Securities, Net of Adjustments	$ 75,000
Promissory Note [Member]
Debt Instrument, Face Amount				$ 425,000

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Stock Options and Warrants (Details) - $ / shares	1 Months Ended	3 Months Ended
	Feb. 28, 2017	Mar. 31, 2018
Number of Options, Beginning Balance		448,000
Number of Options, Granted	30,000	1,600,000
Number of Options, Exercised		0
Number of Options, Expired		0
Number of Options, Ending Balance		2,048,000
Number of Options, Options Exercisable		1,999,250
Weighted Average Exercise Price, Beginning Balance		$ 1.45
Weighted Average Exercise Price, Granted	$ 1.23	1.2
Weighted Average Exercise Price, Exercised		0
Weighted Average Exercise Price, Expired		0
Weighted Average Exercise Price, Ending Balance		1.25
Weighted Average Exercise Price, Options Exercisable		$ 1.25

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Stock Options and Warrants (Details Textual) - USD ($)		1 Months Ended			3 Months Ended
	Dec. 11, 2017	Dec. 29, 2017	Nov. 20, 2017	Feb. 28, 2017	Mar. 31, 2018	Mar. 31, 2017	Jan. 22, 2018	Nov. 06, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				30,000	1,600,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price				$ 1.23	$ 1.2
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				10 months
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate		0.00%		0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate		245.00%		508.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate		2.53%		2.09%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term		5 years	5 years	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date		Mar. 01, 2023		Feb. 25, 2022
Stock or Unit Option Plan Expense					$ 27,295	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value					3,369,000
Units Shares Purchase							600,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights							1,600,000
Class of Warrant or Right, Exercise Price of Warrants or Rights							$ 1.20
Business Combination, Consideration Transferred, Warrants Issued and Issuable					1,676,000
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value					2,720,000
Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	140,000		78,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 1.40		$ 1.425
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			12 months
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%		0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	495.00%		490.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	2.16%		2.09%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	5 years		5 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date	Dec. 12, 2022		Nov. 20, 2022
Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			100,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price			$ 1.425
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate			0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate			490.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate			2.09%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term			5 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date			Nov. 20, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value					147,000
President [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			100,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price			$ 1.425
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate			0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate			490.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate			2.09%
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date			Nov. 20, 2022
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value					147,000
Consultants One [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value					50,000
Consultants Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value					115,000
Consultants Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value					$ 189,000
2017 Equity Incentive Plan [Member]
Common Stock, Capital Shares Reserved for Future Issuance								2,000,000

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Commitment and Contingencies (Details)	Mar. 31, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2018	$ 3,044
2019	4,555
2020	4,555
2021	4,555
2022 & Thereafter	5,315
Total future minimum lease payments	22,024
Less: amount representing interest	(380)
Present value of net minimum lease and obligations	$ 21,644

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Commitment and Contingencies (Details 1)	Mar. 31, 2018 USD ($)
2018	$ 152,628
2019	131,628
2020	0
2021	0
2022 & Thereafter	0
Total	$ 284,256

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Commitment and Contingencies (Details Textual)		1 Months Ended			3 Months Ended
	Mar. 01, 2018 USD ($)	Feb. 13, 2018 ft²	Oct. 20, 2017 USD ($)	Jul. 20, 2016 USD ($) ft²	Mar. 31, 2018 USD ($) ft²
Area of Land | ft²					12,500
Capital Lease Term			57 months
Capital Lease, Incremental Borrowing Rate			1.90%
Short-term Lease, Cost			$ 380
Lease Agreements One [Member]
Area of Land | ft²				24,276
Lessee Leasing Arrangements, Terms Of Lease				36 months
Operating Leases, Rent Expense				$ 13,959	$ 50,501
Other Assets, Noncurrent					14,500
Lease Agreements Two [Member]
Area of Land | ft²		2,850
Lessee Leasing Arrangements, Terms Of Lease		12 months
Operating Leases, Rent Expense	$ 3,000				3,250
Other Assets, Noncurrent					$ 3,000