mCig, Inc. to Report Record Adjusted Earnings on Record Revenue Increase of 1,100
July 28, 2014 --
BELLEVUE, Wash., July 28, 2014 (GLOBE NEWSWIRE) -- mCig, Inc. (OTCQB:MCIG), a technology company that owns, manufactures, and distributes the mCig, VitaCig, and Vapolution products, today announced that the Company expects to report record operating results for its fiscal year ended April 30, 2014. The highlights of mCig's record-breaking year are reviewed below:
The Company expects to report approximately $543,000 in company-wide pro-forma* revenue. This figure includes pro-forma revenue for mCig, Inc., VitaCig, Inc., and Vapolution, Inc. for the year ended April 30, 2014**. This compares with approximately $50,000 in the prior-year ended April 30, 2013 and represents an approximate 1,100% increase.
The Company expects to report profitable Adjusted Earnings* for the year ended April 30, 2014.
The Company expects to report approximately $353,000 in company-wide pro-forma* gross profit for the year ended April 30, 2014. This reflects a gross profit margin of approximately 65%.
These financial results reflect only 15 days of sales for VitaCig (launched on April 15, 2014) and only 103 days for mCig inclusive of days where the company ran out of inventory.
The company expects to report an increase of approximately $2,100,000 in shareholder equity resulting in approximately $1,900,000 in shareholders equity for the year ended April 30, 2014. This compares to negative shareholder equity (deficiency) of ($210,087) for the year ended April 30, 2013 and represents an increase of approximately 900%. This result was achieved as total debt was reduced to zero.
The Company is pleased to report that its intellectual property portfolio is about to be strengthened as the trademarks for mCig, VitaCig, are several weeks away from being awarded the coveted ® registered trademark certification from the United States Patent and Trademark Office (USPTO). From that point forward, all company products will include the ® symbol reflecting the company's commercial ownership of these brands.
The Company will be raising the price of VitaCig to $5 in August reflecting strong demand and continued alignment with the retail distribution strategy being deployed by management. In light of the price increases, the Company will be eliminating shipping costs entirely providing free shipping on all domestic orders with no order minimums.
As of the date of this release, the Company is pleased to report nearly 30,000 customer relationships worldwide between its three brands: mCig, VitaCig, and Vapolution. VitaCig repeat order ratios continue to inch higher and currently stand at nearly 20% roughly 90 days after the launch.
VitaCig, Inc. spin-off, pro-rata dividend, and IPO remains on-track, and the Company remains committed to seeing this process through allowing VitaCig to focus on continued growth and dominance in the nicotine-free electronic cigarette space while transforming mCig, Inc. into a leading cannabis-focused business that will enter into more traditional cannabis related industries while staying true to the core principles that have guided the Company. As previously mentioned, mCig, Inc. will continue to hold nearly 50% of VitaCig, Inc. providing: potential upside from future growth in the value of VitaCig, a mechanism for dilution-free financing for mCig, Inc. parent that can be deployed in the rapidly growing Cannabis industry, a strengthened balance sheet for the purpose of obtaining a potential up-listing to a national exchange such as NASDAQ or NYSE MKT.
In August, VitaCig will be launching two new flavors targeting the skincare and stress-reduction lifestyle categories. VitaCig "Grace" and VitaCig "Calm". Both flavors will go on sale for $5 each and will increase the VitaCig portfolio of flavors to five: Energize, Refresh, Relax, Calm, Grace.
The first VitaCig Truck is seeing overwhelming acceptance within the community. Beyond driving sales, the truck is also educating consumers on the benefits of VitaCig over traditional nicotine electronic cigarettes as well as the obvious benefits of vaporization over traditional combustion smoking. The VitaCig truck can be seen in New York City over the next 30 days in places such as Yankee Stadium, Madison Square Garden, and Union Square.
The Company is preparing to automate and outsource its fulfillment operations. This decision was made after careful consideration and due to the strength of sales and growth in both our direct to consumer business as well as our WDR business. The outsourced fulfillment center has already begun fulfilling a small percentage of current orders. Following a comprehensive review of this test-run all new inventory will be shipped directly to the third-party fulfillment center.
The Company continues to see strong viral adoption on social media platforms: Instagram, Facebook, Youtube, and Twitter driven in part by world famous brand ambassadors, Rick Ross, Bam Margera. The Company continues to negotiate additional brand ambassador deals and is hopeful that it will close its most important deal yet with a world-famous reality TV star on the E! Television Network.
The Company has executed an agreement with one of the most famous hospitality groups in New York City. Due to a confidentiality clause in the agreement, the Company cannot yet disclose the name of the group. The transaction calls for VitaCig's to be distributed in each of the venues operated by the group for a period of one year.
The Company will be publishing a comprehensive 30 page Annual Report in lieu of its usual monthly presentation. The Annual Report will include a personal letter from CEO Paul Rosenberg summarizing the first year results.
The Company will be publishing the Annual Report following the publication of its Form 10-K with the Securities and Exchange Commission. This is expected to occur over the next 5-14 days.
* The Company cautions investors that the measures "Adjusted Profit" and "Pro-Forma" reflect non-GAAP (Generally Accepted Accounting Principles) measures. mCig presents these measures because management believes that it is appropriate for investors to consider results excluding these items in addition to the results reported in accordance with GAAP. mCig believes that the non-GAAP financial measure of Adjusted Earnings provides a consistent and comparable measure of performance of its businesses to help shareholders understand performance trends. This information is not intended to be viewed as an alternative to GAAP information.
** The Company cautions investors that Vapolution, Inc. revenues will not be included in the upcoming 10-K due to an internal decision to carry Vapolution, Inc. under the investment method vs. the consolidation method. The company may change this designation in the upcoming quarters.
"While this is our first Annual Report since launching our brands mCig/VitaCig and acquiring Vapolution, in reality these figures represent only 105 days of operations due to the timing of the various launches. Given our unconventional fiscal year-end of April 30, these results are considered our Annual Results, and we have taken the time to provide a comprehensive annual update in line with what our shareholders expect from us," observed Paul Rosenberg, Chief Executive Officer of mCig, Inc. "We are extremely proud of our results thus far and are continuing to see both growth and adoption indicating that mCig and VitaCig are becoming leaders in their respective segments. We look forward to updating our shareholders via our Form 10-K and Inaugural Annual Report which will be published on our website."
About mCig, Inc.
mCig, Inc. (OTCQB:MCIG) is a technology company focused on two long-term secular trends sweeping the globe: (1) The decriminalization and legalization of marijuana for medicinal or recreational purposes (2) The adoption of electronic vaporizing cigarettes (commonly known as "eCigs") by the world's 1.2 Billion smokers. The company manufactures and retails the mCig – the world's most affordable vaporizer priced at only $10. Designed in the USA – the mCig provides a superior smoking experience by heating plant material, waxes, and oils delivering a smoother inhalation experience. The company also owns Vapolution, Inc. which manufactures and retails home-use vaporizers such as the Vapolution 2.0. Through its wholly owned subsidiary, VitaCig, Inc. the company manufactures and retails the VitaCig, a $3 nicotine-free eCig that delivers a water-vapor mixed with vitamins and organic flavors. Through its wholly owned subsidiary, LiqCig, Inc. the company is engaged in the development of the world's first pre-packaged alcoholic eCig. See more at: http://www.mCig.org/, www.Vapolution.com, www.VitaCig.org
The Company believes that a well regulated marijuana industry is emerging as more states follow the lead of Washington and Colorado in legalizing marijuana. A similar trend is developing within the eCig industry following the first acquisition of an electronic cigarette brand (Blucigs) by a traditional tobacco company Lorillard Inc. for $135 million followed by another acquisition in February 2014 by Altria Group Inc. of Green Smoke for $150 million. Wells Fargo analyst Bonnie Herzog estimates that eCig sales may rise from $1 Billion in 2013 to $10 billion over the next three years.
mCig, Inc. (OTCQB:MCIG) has positioned itself as a first mover at the intersection of these two trends and hopes to create shareholder value by making the mCig one of the leading choices for electronic consumption of plant material. - See more at: http://www.mcig.org/investors/investor-opportunity-subpage/
Safe Harbor Statement
Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, risks and uncertainties relating to the Company's ability to develop, market and sell products based on its technology; the expected benefits and efficacy of the Company's products and technology; the availability of substantial additional funding for the Company to continue its operations and to conduct research and development, and future product commercialization; and the Company's business, research, product development, regulatory approval, marketing and distribution plans and strategies.
This release includes forward-looking statements contained within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding mCig's expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions, are forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond mCig's control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. Factors that may cause actual results to differ materially from those in the forward-looking statements include those set forth in mCig's Form 10-K and other report filings with the SEC. mCig is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACT: Paul Rosenberg