VPR Brands, LP reported significant financial changes in its 10-Q filing for the quarter ending September 30, 2024. The company experienced a notable decline in total revenues, which fell to $1.4 million from $3.5 million in the same quarter of the previous year. This decrease was primarily attributed to a substantial drop in royalty revenues, which decreased from $2.7 million to $116,764, due to the amortization of an initial fee from a royalty agreement and a large distribution sales order in Q1 2023. Conversely, product sales increased to $1.3 million from $805,185, reflecting expanded operations.

For the nine months ended September 30, 2024, total revenues were $4.7 million, down from $8.5 million in the prior year. The decline in revenue was again linked to reduced royalty income, which fell from $3.5 million to $609,765. Gross margins also decreased, with the company reporting a margin of 29% for the nine-month period compared to 54% in 2023.

Operating expenses rose significantly, reaching $2.2 million for the nine months ended September 30, 2024, up from $1.4 million in the previous year. This increase was driven by higher marketing, payroll, and professional fees, including $247,193 in unit-based compensation for the issuance of common units to employees. The net income for the nine months ended September 30, 2024, was $212,227, a sharp decline from $3.9 million in the same period of 2023.

The company’s cash position also saw a decrease, with cash on hand at $1.5 million as of September 30, 2024, down from $1.8 million at the end of 2023. Accounts receivable increased significantly to $589,543, up from $337,774, while inventory rose to $848,551 from $563,503. Total assets increased to $3.3 million, compared to $3.2 million at the end of the previous fiscal year.

VPR Brands has also made strategic moves, including the acquisition of intangible assets from CartDub LLC for $30,000 and the introduction of a new product line, the DISSIM brand pocket lighters. The company initiated a voluntary recall of approximately 62,200 lighters in February 2024, which has impacted its financials, resulting in a refund liability of $182,545 as of September 30, 2024.

The company continues to focus on monetizing its patents related to electronic cigarettes and vaporizers, while also addressing internal control weaknesses in financial reporting. Remedial efforts are underway to enhance financial oversight and reporting accuracy.