VPR Brands, LP 10-Q for FY2026 Q1
VPR Brands, LP. (VPRB)
About this 10-Q
VPR Brands, LP filed this 10-Q on May 18, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $580.07K
- down 37.8% from $933.33K a year earlier
- Net income
- $1.94M
- compared with a net loss of $290.86K a year earlier
- Diluted EPS
- $0.02
- compared with $0.00 a year earlier
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from to
Commission file number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (zip code)
(Registrant’s telephone number, including area code)
N/A
Former name, former address and former fiscal year, if changed since last report
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
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.
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| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company | |
| Emerging growth company |
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. ☐
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Indicate the number of units outstanding of each of the registrant’s classes of common units as of the latest practicable date.
| Class | Outstanding at May 15, 2026: | |
| Common Units, No par value |
TABLE OF CONTENTS
i
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This report includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs.
You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in this report, in Part I, Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2025, as the same may be amended from time to time, and our other filings with the Securities and Exchange Commission.
Other sections of this report include additional factors which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.
OTHER PERTINENT INFORMATION
Unless specifically set forth to the contrary, when used in this report the terms “VPR Brands,” the “Company,” “we,” “our,” “us,” and similar terms refer to VPR Brands, LP, a Delaware limited partnership.
The information which appears on any website referenced herein, including, but not limited to www.vprbrands.com, is not part of this report.
ii
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
VPR BRANDS, LP.
CONDENSED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Vendor deposits | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Right-of-use asset | ||||||||
| Deferred tax asset | ||||||||
| Intangible assets, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND PARTNERS’ SURPLUS | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accounts payable - related party | ||||||||
| Customer deposits | ||||||||
| Lease liabilities, current portion | ||||||||
| Notes payable, current portion | ||||||||
| Refund liability | ||||||||
| Income tax payable | ||||||||
| Total current liabilities | ||||||||
| Notes payable, less current portion | ||||||||
| Lease liabilities, net of current portion | ||||||||
| Total liabilities | ||||||||
| Partners’ Surplus (Deficit): | ||||||||
| Class A preferred units, $ | ||||||||
| Common units - | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total partners’ surplus (deficit) | ( | ) | ||||||
| Total liabilities and partners’ surplus (deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed interim financial statements.
1
VPR BRANDS, LP.
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | ||||||||
| Product sales | $ | $ | ||||||
| Royalty revenue | ||||||||
| Total revenue | ||||||||
| Cost of Sales | ||||||||
| Gross profit | ||||||||
| Operating Expenses: | ||||||||
| Selling, general and administrative | ||||||||
| Total operating expenses | ||||||||
| Net Operating Loss | ( | ) | ( | ) | ||||
| Other Income (Expense): | ||||||||
| Settlement income, net | ||||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other income (expense), net | ( | ) | ||||||
| Net Income (Loss), before Provision for Income Taxes | $ | $ | ( | ) | ||||
| Provision for Income Taxes | ( | ) | ||||||
| Net Income (Loss) | ( | ) | ||||||
| Net Income (Loss) Per Common Unit - Basic | $ | $ | ( | ) | ||||
| Net Income (Loss) Per Common Unit - Diluted | $ | $ | ( | ) | ||||
| Weighted-Average Common Units Outstanding - Basic | ||||||||
| Weighted-Average Common Units Outstanding - Diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed interim financial statements.
2
VPR BRANDS, LP.
CONDENSED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL SURPLUS
(Unaudited)
| Total | ||||||||||||||||||||||||
| Common Units | Common Units to be Issued | Accumulated | Partners’ Capital | |||||||||||||||||||||
| Number | Amount | Number | Amount | Deficit | Surplus | |||||||||||||||||||
| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
| Net Loss | - | - | ( | ) | ( | ) | ||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||
| Net Income | - | - | ||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed interim financial statements.
3
VPR BRANDS, LP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||||||||
| Amortization of right of use asset | ||||||||
| Amortization of intangible | ||||||||
| Interest on lease liability | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Royalty receivable | ( | ) | ||||||
| Inventory | ( | ) | ||||||
| Vendor deposits | ( | ) | ||||||
| Accounts receivable | ||||||||
| Customer deposits | ( | ) | ||||||
| Prepaid | ||||||||
| Employee advances | ( | ) | ( | ) | ||||
| Other current assets | ( | ) | ||||||
| Refund liability | ( | ) | ( | ) | ||||
| Accounts payable - related party | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Operating lease liability | ( | ) | ( | ) | ||||
| Income tax payable | ( | ) | ||||||
| Net cash provided by (used in) operating activities | ( | ) | ||||||
| Cash Flows from Investing Activities: | ||||||||
| Purchase of intangible assets | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash Flows from Financing Activities: | ||||||||
| Payments of convertible notes payable | ( | ) | ||||||
| Payments of notes payable | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Change in Cash | ( | ) | ||||||
| Cash - Beginning of the Year | ||||||||
| Cash - End of the Year | $ | $ | ||||||
| Supplemental Cash Flow Information: | ||||||||
| Interest paid in cash | $ | $ | ||||||
| Income taxes paid in cash | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed interim financial statements.
4
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
NOTE 1: ORGANIZATION
VPR Brands, LP (the “Company”, “we”,
“our”) was incorporated in New York on
The Company is engaged in various monetization strategies of a U.S. patent that the Company owns covering electronic cigarette, electronic cigar and personal vaporizer patents, as well as a patent for an inverted pocket lighter. The Company also has several trademarks (ELF, PHANTOM, HRB, VPOD, VAPOR X, and RIPPER) for which it is also engaged in licensing and various monetization strategies. The Company also designs, develops, markets and distributes products (the HoneyStick brand of vaporizers and the Goldline CBD products) oriented toward the cannabis markets. This allows us to capitalize on the rapidly growing expansion within the cannabis markets. The Company is also identifying electronic cigarette companies that may be infringing our patents and trademarks and exploring options to license and/or enforce our patents. The Company is now also selling DISSIM brand pocket lighters for which it holds a U.S. patent and patents pending. The Company also has patents pending in the cigar accessory space and sells these proprietary accessories.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
In the opinion of management, the accompanying unaudited condensed financial statements are prepared in accordance with instructions for Form 10-Q, include all adjustments (consisting only of normal recurring accruals) which we considered as necessary for a fair presentation of the results for the periods presented. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results to be expected for future periods or the full year.
Use of Estimates
GAAP requires the Company to make judgments, 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, the reported amounts of revenue and expenses, cash flows and the related footnote disclosures during the period. On an on-going basis, the Company reviews and evaluates its estimates and assumptions. Actual results could differ from these estimates.
Financial Condition
As reflected in the financial statements, the Company generated positive
cash flows from operations of $
5
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
Cash
Cash is carried at cost and represents cash on
hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of
three months or less as of the purchase date of such investments. The Company had no cash equivalents as of March 31, 2026, and December
31, 2025. The Company’s cash is held at major commercial banks, which may at times exceed the Federal Deposit Insurance Corporation
(“FDIC”) limit. To date, the Company has not experienced any losses on its invested cash. On March 31, 2026, and December
31, 2025, the Company had approximately $
Accounts Receivable and Royalty Receivable
The Company recognizes an allowance for expected credit losses in accordance with Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses, issued by the Financial Accounting Standards Board (“FASB”). This ASU establishes a current expected credit loss model, which requires the Company to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.
To estimate expected credit losses, the Company segregated its receivables into four risk-based categories, each reflecting distinct credit risk characteristics. A loss rate was then applied to each category based on historical experience and anticipated losses given the associated risk factors.
An allowance for credit losses is recorded through a provision for bad debts charged to earnings. The evaluation of expected credit losses is inherently subjective and requires management to make estimates that may be subject to significant revision as additional information becomes available.
As of March 31, 2026, and December 31, 2025, the Company had an allowance
for expected credit losses of $
Inventory
Inventory consisting of finished products is stated at the lower of cost or net realizable value. At each balance sheet date, the Company evaluates its ending inventories for excess quantities and obsolescence. This evaluation primarily includes an analysis of forecasted demand in relation to the inventory on hand, among consideration of other factors. The physical condition (e.g., age and quality) of the inventories is also considered in establishing its valuation. Based upon the evaluation, provisions are made to reduce excess or obsolete inventories to their estimated net realizable values. Once established, write-downs are considered permanent adjustments to the cost basis of the respective inventories. These adjustments are estimates, which could vary significantly, either favorably or unfavorably, from the amounts that the Company may ultimately realize upon the disposition of inventories if future economic conditions, customer inventory levels, product discontinuances, sales return levels or competitive conditions differ from the Company’s estimates and expectations.
Leases
The Company applied the FASB’s Accounting Standards Codification (“ASC”) Topic 842, Leases (Topic 842) to arrangements with lease terms of 12 months or more. Operating lease right of use assets (“ROU”) represents the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the statements of operations.
6
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
The Company has an operating lease principally for warehouse and office space. Management evaluates each lease independently to determine the purpose, necessity to its future operations, and other appropriate facts and circumstances.
Revenue Recognition
The Company recognizes revenue when its customer obtains control of promised goods or services which occurs at a point in time, typically upon shipment to the customer, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenue following the five-step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the performance obligation is satisfied.
Product Revenue
Revenue from product sales is recognized when
the customer obtains control of the Company’s product, which occurs at a point in time, typically upon shipment to the customer.
The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that
it would have recognized is one year or less or the amount is immaterial.
Royalty Revenue
The Company generates royalty revenue from license and sublicense agreements that grant third parties the right to use its intellectual property, including trademarks and patents, in exchange for sales-based royalties.
License and Sublicense Agreements
On January 2, 2023, the Company entered into a
license agreement granting a third-party licensee exclusive rights to use certain trademark and patent assets in exchange for minimum
monthly royalty payments of $
In March 2023, the licensee entered into a sublicense
agreement with a third-party sublicensee, under which the sublicensee agreed to pay the Company sales-based royalties of
During the fourth quarter of 2023, the Company and the licensee ended the exclusivity agreement and transitioned to a sales-based royalty structure. Under the revised agreement:
| ● | The sublicensee continues to pay the Company a |
| ● | The licensee now pays a matching |
On January 30, 2026, the Company entered into
a settlement with ELF Brand LLC (“EBL”) to terminate its ELF® brand license. The Company paid $
The Company recognizes royalty revenue in the period in which the criteria for revenue recognition under ASC 606, Revenue from Contracts with Customers, are met, which may be based on reported sales or upon receipt of payment.
The following table provides certain information about accounts receivable and royalty receivable from contracts with customers as of March 31, 2026 and December 31, 2025:
| Accounts | Royalty | |||||||
| Receivable | Receivable | |||||||
| December 31, 2025 | $ | $ | ||||||
| March 31, 2026 | $ | $ | ||||||
7
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
Voluntary Recall
In February 2024, the Company initiated a voluntary
recall of approximately
The Company has begun processing claims and returns
stemming from this recall. To date, the volume of returns has been minimal, and it is not anticipated that returns will exceed the revenue
amount already written off. The Company has accounted for this adjustment as a liability and will continue to reevaluate its assumptions
based on incoming data. The total refund liability relating to the recall of the lighters was $
Customer Concentration
During the three months ended March 31, 2026,
four customers accounted for approximately
| 2026 | 2026 | 2026 | 2026 | |||||||||||||
| Customer | Revenue ($) | Revenue % | Receivables ($) | Receivables % | ||||||||||||
| A | $ | % | % | |||||||||||||
| B | % | | % | |||||||||||||
| C | % | $ | % | |||||||||||||
| D | % | % | ||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
During the three months ended March 31, 2025,
| 2025 | 2025 | 2025 | 2025 | |||||||||||||
| Customer | Revenue ($) | Revenue % | Receivables ($) | Receivables % | ||||||||||||
| A | $ | % | % | |||||||||||||
| B | % | - | % | |||||||||||||
| C | % | $ | % | |||||||||||||
| D | % | % | ||||||||||||||
| Total | $ | % | $ | % | ||||||||||||
Unit-Based Compensation
The Company may issue restricted units to consultants for various services. Costs for these transactions will be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common units is to be measured at the earlier of: (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached, or (ii) the date at which the counterparty’s performance is complete. The Company may issue units as compensation in future periods for services associated with the registration of the common units.
Unit-based payments to employees, including grants of employee options, are recognized as compensation expense in the financial statements based on their fair value, in accordance with ASC Topic 718. This expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (typically the vesting period).
8
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
For the three months ended March 31, 2026 and
2025, the Company recognized
Convertible Instruments
The Company accounts for convertible instruments in accordance with ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” This update significantly simplifies the accounting for convertible instruments by eliminating the requirement to bifurcate embedded conversion options from their host instruments, unless the conversion feature independently meets the definition of a derivative under ASC 815, Derivatives and Hedging Activities. Under ASC 815, a conversion feature is treated as a derivative only if its economic characteristics and risks are not clearly and closely related to those of the host contract, and other specific conditions are met.
When it is determined that the embedded conversion options do not require bifurcation, the entire convertible instrument is accounted for as a single liability at amortized cost. Discounts or premiums on convertible instruments are recognized based on the difference between the proceeds received and the principal amount and are amortized over the life of the instrument using the effective interest method.
In the rare instances where a conversion option is bifurcated and accounted for as a derivative, the Company would apply the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the units issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.
Fair Value
The carrying values of the Company’s notes payables, convertible notes, and accounts payable and accrued expenses approximate their fair values because of the short-term nature of these instruments.
Basic and Diluted Net Income (Loss) Per Unit
The Company computes net income (loss) per unit in accordance with FASB ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common unitholders by the weighted average number of common units outstanding during the period. Diluted EPS gives effect to all dilutive potential common units outstanding during the period including options, using the treasury stock method, and convertible notes, using the if-converted method. Diluted EPS excludes all dilutive potential common units if their effect is anti-dilutive.
For the three months ended March 31, 2026, there
were no potentially dilutive units since all convertible notes were fully settled in January 2025 and hence, were outstanding as
of March 31, 2026.
| Weighted | ||||||||
| For the Three Months Ended March 31, 2026: | Average Units | Net Income | ||||||
| Basic and Diluted | $ | |||||||
| Net Income Per Common Unit – Basic and Diluted | ||||||||
For the three months ended March 31, 2025, all
convertible notes were fully settled in January 2025 and
| Weighted | ||||||||
| Average | ||||||||
| For the Three Months Ended March 31, 2025: | Units | Net Loss | ||||||
| Basic and Diluted | $ | ( | ) | |||||
| Net Loss Per Common Unit – Basic and Diluted | ( | ) | ||||||
9
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
Income Taxes
The Company has recorded income taxes in accordance with ASC 740, “Income Taxes,” which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Additionally, the Company follows the provisions of FASB ASC 740-10, “Uncertainty in Income Taxes,” which establishes recognition thresholds for tax positions. Under this standard, an entity may only recognize tax positions that meet a “more-likely-than-not” threshold. As of March 31, 2026 and December 31, 2025, the Company does not believe it has any uncertain tax positions that would require recognition or disclosure in the accompanying unaudited condensed financial statements.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This update aims to enhance transparency for users of financial statements by requiring public business entities to disaggregate specific expense categories. The update mandates disclosures in the notes to financial statements, detailing the composition and trends of key expense categories within major income statement captions. These enhanced disclosures are expected to help investors more effectively assess the entity’s performance, understand its cost structure, and make more accurate forecasts of future cash flow. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the potential impact of ASU 2024-03 on our financial reporting and disclosures.
In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU. The Company is currently evaluating the potential impact of ASU 2024-03 on its financial reporting and disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instrument-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU affects entities that apply the practical expedient and accounting policy election (if applicable) when estimating expected credit losses on current accounts receivable and/or current contract assets arising from transactions under Topic 606, including those assets acquired in a transaction accounted for under Topic 805, Business Combinations. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the potential impact of ASU 2025-05 on its financial reporting and disclosures.
10
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
NOTE 3: GOING CONCERN
The accompanying unaudited condensed financial
statements have been prepared on a going concern basis, which contemplates the Company will continue to realize its assets and discharge
its liabilities in the normal course of business. The Company’s operating results raise substantial doubt
about the Company’s ability to continue as a going concern, despite net income of $
The Company expects to meet its current capital requirements through existing operations. However, there can be no assurance that the Company will generate sufficient cash flows to meet all working capital needs. If operating cash flows are insufficient, the Company may need to explore alternative sources of capital to satisfy its liquidity requirements.
NOTE 4: INTANGIBLE ASSETS
On March 20, 2025, the Company and KS Brushes
DBA Kief Sweeper LLC (“Kief Sweeper”) entered into a Bill of Sale and Assignment and Assumption Agreement (the “Kief
Sweeper Agreement”). Pursuant to the terms of the Kief Sweeper Agreement, the Company agreed to purchase and Kief Sweeper agreed
to sell to the Company, subject to the provisions of the Kief Sweeper Agreement, certain assets consisting of certain intellectual property,
including but not limited to the trade name “Kief Sweeper”, the internet domain www.kiefsweeper.com, and a patent pending
amounting to $
The Company has allocated the purchase price among the acquired intangible assets based on their fair values at the acquisition date. These intangible assets are considered to have definite lives and will be amortized on a straight-line basis over their estimated useful lives, which are as follows:
| Purchased Asset | March 31, 2026 | December 31, 2025 | Useful Life | |||||||
| Intellectual Property | $ | $ | ||||||||
| Trademarks | $ | $ | ||||||||
| Trade name | $ | $ | ||||||||
| Total Intangible Assets | $ | $ | ||||||||
For the
three months ended March 31, 2026 and March 31, 2025, the Company recognized amortization expense related to intangible assets of $
The following table presents the intangible assets net of amortization expenses:
| March 31, | December 31, | |||||||
| Intangible Assets, Net of Amortization | 2026 | 2025 | ||||||
| Total Intangible Assets | $ | $ | ||||||
| Accumulated amortization | $ | $ | ||||||
| Intangible Assets Net of Amortization | $ | $ | ||||||
The following table presents the future amortization expenses related to the acquired intangible assets:
| For the fiscal year ending December 31, | Amortization Expense | |||
| 2026 (remaining) | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| $ | ||||
11
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
NOTE 5: NOTES PAYABLE
Paypal Note
On September 24, 2019, the Company entered into
a working capital note agreement with Paypal Working Capital (“Paypal Note”), pursuant to which the Company borrowed $
Economic Injury Disaster Loan
On July 9, 2020 and June 24, 2020, the Company
received an Economic Injury Disaster Loan (“EIDL”) in the aggregate amount of $
Daiagi Note
On May 18, 2022, the Company issued a promissory
note in the principal amount of $
The following is a summary of notes payable activity at March 31, 2026 and December 31, 2025:
| Total notes payable at December 31, 2025 | $ | |||
| Repayments of notes payable | $ | ( | ) | |
| Balance as of March 31, 2026 | $ |
NOTE 6: RELATED PARTY TRANSACTIONS
Other related party transactions
As of March 31, 2026, the Company has a receivable
of $
As of March 31, 2026, and December 31, 2025, the
Company owed $
12
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
NOTE 7: CONVERTIBLE NOTES PAYABLE
Brikor Note
On February 15, 2019, the Company issued a senior
convertible promissory note (the “Brikor Note”) in the principal amount of $
At any time after the first anniversary of the issue date, the holder may require the Company, upon at least 30 business days’ written notice, to redeem all or any portion of the Brikor Note. The portion of the Brikor Note subject to redemption would be redeemed by the Company in cash.
The Brikor Note was convertible into common units
of the Company. Pursuant to the terms of the Brikor Note, Brikor had the right, at its option, to convert any portion of the outstanding
and unpaid Conversion Amount (as hereinafter defined) into common units in accordance with the provisions of the Brikor Note at the Conversion
Rate (as hereinafter defined). The number of common units issuable upon conversion of any Conversion Amount was determined by dividing
(x) such Conversion Amount by (y) $
Daiagi and Daiagi Note
On February
15, 2019, the Company issued a senior convertible promissory note in the principal amount of $
At any time after the first anniversary of the issue date, the holder may require the Company, upon at least 30 business days’ written notice, to redeem all or any portion of the Daiagi and Daiagi Note. The portion of the Daiagi and Daiagi Note subject to redemption would be redeemed by the Company in cash.
The Daiagi and Daiagi Note was convertible into
common units of the Company. Pursuant to the terms of the Daiagi and Daiagi Note, the Daiagis had the right, at their option, to convert
any portion of the outstanding and unpaid Conversion Amount into common units in accordance with the provisions of the Daiagi and Daiagi
Note at the Conversion Rate. The number of common units issuable upon conversion of any Conversion Amount was determined by dividing (x)
such Conversion Amount by (y) $
13
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
Amber Investments Note
On February 15, 2019, the Company issued a senior
convertible promissory note in the principal amount of $
At any time after the first anniversary of the issue date, the holder may require the Company, upon at least 30 business days’ written notice, to redeem all or any portion of the Amber Investments Note. The portion of the Amber Investments Note subject to redemption would be redeemed by the Company in cash.
The Amber Investments Note was convertible into
common units of the Company. Pursuant to the terms of the Amber Investments Note, Amber Investments had the right, at its option, to convert
any portion of the outstanding and unpaid Conversion Amount into common units in accordance with the provisions of the Amber Investments
Note at the Conversion Rate. The number of common units issuable upon conversion of any Conversion Amount was determined by dividing (x)
such Conversion Amount by (y) $
K& S Pride Note
On February 19, 2019, the Company issued a senior
convertible promissory note in the principal amount of $
At any time after the first anniversary of the issue date, the holder may require the Company, upon at least 30 business days’ written notice, to redeem all or any portion of the K & S Pride Note. The portion of the K & S Pride Note subject to redemption would be redeemed by the Company in cash.
The K & S Pride Note was convertible into
common units of the Company. Pursuant to the terms of the K & S Pride Note, K & S Pride had the right, at its option, to convert
any portion of the outstanding and unpaid Conversion Amount into common units in accordance with the provisions of the K & S Pride
Note at the Conversion Rate. The number of common units issuable upon conversion of any Conversion Amount was determined by dividing (x)
such Conversion Amount by (y) $
Surplus Depot Note
On February 20, 2019, the Company issued a senior
convertible promissory note in the principal amount of $
At any time after the first anniversary of the issue date, the holder may require the Company, upon at least 30 business days’ written notice, to redeem all or any portion of the Surplus Depot Note. The portion of the Surplus Depot Note subject to redemption would be redeemed by the Company in cash.
14
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
The Surplus Depot Note was convertible into common
units of the Company. Pursuant to the terms of the Surplus Depot Note, Surplus Depot had the right, at its option, to convert any portion
of the outstanding and unpaid Conversion Amount into common units in accordance with the provisions of the Surplus Depot Note at the Conversion
Rate. The number of common units issuable upon conversion of any Conversion Amount would be determined by dividing (x) such Conversion
Amount by (y) $
The following is a summary of convertible notes payable activity for the years ended March 31, 2026 and December 31, 2025:
| Balance at January 1, 2025 | ||||
| Repayments of principal | ( | ) | ||
| Balance at December 31, 2025 | $ |
As of March 31, 2026, the Company did not have any senior convertible promissory notes outstanding.
NOTE 8: PARTNERS’ CAPITAL SURPLUS
The Company is authorized to issue
For the three months ended March 31, 2026 and year ended December 31, 2025, the Company did not recognize any unit-based compensation.
Class A Preferred Units
As of March 31, 2026, the designation, powers, preferences and rights of the Class A preferred units and the qualifications, limitations and restrictions thereof were as follows:
Number and Stated Value. The number
of authorized Class A preferred units is
Rights. Except as otherwise set forth in the Company’s Limited Partnership Agreement (as amended through March 31, 2026, the “Partnership Agreement”), each Class A preferred unit has all of the rights, preferences and obligations of the Company’s common units as set forth in the Partnership Agreement and shall be treated as a common unit for all other purposes of the Partnership Agreement.
Dividends
Rate. Each Class A preferred unit is entitled
to receive an annual dividend at a rate of
Liquidation. In the event of a liquidation, dissolution or winding up of the Company, a merger or consolidation of the Company wherein the Company is not the surviving entity, or a sale of all or substantially all of the assets of the Company, each Class A unit will be entitled to receive, prior an in preference to any distribution of any of the assets or surplus funds of the Company to the holders of common units or any other Company securities ranking junior to the Class A preferred units, or to Soleil Capital Management LLC, the Company’s general partner (the “General Partner”), an amount per Class A preferred unit equal to any accrued but unpaid dividends. If, upon such an event and after the payment of preferential amounts required to be paid to holders of any Company securities having a ranking upon liquidation senior to the Class A preferred units, the assets of the Company available for distribution to the partners of the Company are insufficient to provide for both the payment of the full Class A liquidation preference and the preferential amounts (if any) required to be paid to holders of any other
Company securities having a ranking upon liquidation pari passu with the Class A preferred units, such assets as are so available shall be distributed among the Class A preferred units and the holders of any other series of Company securities having a ranking upon liquidation pari passu with the Class A preferred units in proportion to the relative aggregate preferential amount each such holder is otherwise entitled to receive.
15
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
Conversion Rights
Conversion. Upon notice, a holder of Class A preferred units has the right, at its option, to convert all or a portion of the Class A preferred units held into fully paid and nonassessable Company common units.
Conversion Price. Each Class A preferred
unit is convertible into a number of common units equal to (x) the Stated Value plus any accrued and unpaid dividends, divided by (y)
the Conversion Price (as hereinafter defined). The “Conversion Price” means
Conversion Limitation. In no event shall
a holder of Class A preferred units be entitled to convert any of the Class A preferred units in excess of that number of Class A preferred
units upon conversion of which the sum of (1) the number of common units beneficially owned by such holder and its affiliates (other than
common units which may be deemed beneficially owned through the ownership of the unconverted Class A preferred units or the unexercised
or unconverted portion of any other security of the Company subject to a limitation on conversion or exercise analogous to the limitations
contained herein), and (2) the number of common units issuable upon the conversion of all Class A preferred units held by such holder
would result in beneficial ownership by the holder and its affiliates of more than
On April 28, 2026, the General Partner executed the Third Amendment (the “Third Amendment”) to the Partnership Agreement, in order to amend the terms of the Company’s Class A preferred units (Refer Note 11).
NOTE 9: COMMITMENTS AND CONTINGENCIES
Lease Agreements
Warehouse and Office Space
On May 19, 2022, the Company entered into a
As of March 31, 2026, and December 31, 2025, right-of-use assets (“ROU”) are summarized as follows:
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Warehouse and office lease right-of-use assets | $ | $ | ||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Right-of-use assets, net | $ | $ | ||||||
As of March 31, 2026, and December 31, 2025, operating lease liabilities related to the ROU assets are summarized as follows:
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Lease liabilities related to warehouse and office lease right-of-use assets | $ | $ | ||||||
| Less: current portion of lease liabilities | ( | ) | ( | ) | ||||
| Lease liabilities, net of current portion | $ | $ | ||||||
As of March 31, 2026, the weighted average lease term remaining is
16
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
The following table presents the maturity of the Company’s operating lease liabilities as of March 31, 2026:
| Twelve Months Ended March 31, | Amount | |||
| 2026 (Remainder) | $ | |||
| 2027 | ||||
| Total minimum non-cancelable operating lease payments | ||||
| Less: discount to fair value | ( | ) | ||
| Total lease liability as of March 31, 2026 | $ | |||
The Company amortized $
The total rent expense for the three months ended
March 31, 2026, and 2025 totaled $
Legal Matters
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. Except as set forth below and/or as previously disclosed, there are no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations and there are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
On December 17, 2024, the Company entered into
a Settlement Agreement and Release (“Daze Agreement”) with 7 Daze, LLC (“Daze”) following assertion by the Company
of patent infringement of U.S. patent no. 8,205,622 (the “Patent”) by Daze’s auto draw electronic cigarettes (the “Dispute”).
Pursuant to the terms of the Daze Agreement, the parties agreed to settle the Dispute, and the Company granted to Daze and certain of
its affiliates a fully paid-up, royalty free, non-exclusive license to practice the invention in the Patent. Pursuant to the terms of
the Daze Agreement, Daze agreed to pay the Company the sum of $
| (i) | $ |
| (ii) | Six monthly payments of |
As of December 31, 2025, the Company has received all of the amounts due under the Daze Agreement.
On February 17, 2025, the Company entered into a Settlement Agreement
and Release (the “Pop Vapor Agreement”) with Pop Vapor Co, LLC (“Pop Vapor”) regarding Patent (United States Patent
No. 8,205,622) infringements of Company branded products. Pursuant to the terms of the Pop Vapor Agreement, Pop Vapor agreed to pay the
Company $
On March 27, 2025, the Company entered into a Settlement Agreement
and Release (the “Zaydan Agreement”) with Zaydan Innovations, Inc. (“Zaydan”) regarding Patent infringements of
Company branded products. Pursuant to the terms of the Zaydan Agreement, Zaydan agreed to pay the Company $
17
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
On May 5, 2025, the Company entered into a Settlement
Agreement and Release (the “Ashh Agreement”) with Ashh, Inc. (“Ashh”) regarding trademark and patent infringements
of Company branded products. Pursuant to the terms of the Ashh Agreement, Ashh agreed to pay the Company $
On May 29, 2025, the Company entered into a Settlement Agreement and
Release (the “All Rise Agreement”) with All Rise Records Inc. (“All Rise”) regarding Patent infringements of Company
branded products. Pursuant to the terms of the All Rise Agreement, All Rise agreed to pay the Company $
On September 10, 2025, the Company entered into
a Settlement Agreement and Release (the “Ferrara Agreement”) with Ferrara Candy Company (Ferrara) in relation to the ‘935
Application and the WIPO Registration, and Ferrara has filed Opposition Proceeding before the Trademark and Trial and Appeal Board. Pursuant
to the terms of the Ferrara Agreement, Ferrara agreed to pay the Company $
In November 2025, the Company entered into a Settlement
Agreement and Release (the “Flumgio Agreement”) with Flumgio Technology Inc. (Flumgio) regarding Patent infringements of Company
branded products. Pursuant to the terms of the Flumgio Agreement, Flumgio agreed to pay the Company $
In December 2025, the Company entered into a Settlement
Agreement and Release (the “J Brands Agreement”) with J Brands LLC (J Brands) regarding Patent infringements of Company branded
products. Pursuant to the terms of the J Brands Agreement, J Brands agreed to pay the Company $
On January 30, 2026, the Company and EBL, an unaffiliated licensee of the Company, entered into a Litigation Resolution Agreement (the “EBL Agreement”) with Shenzhen Weiboli Technology Co, Ltd (“Weiboli”), Shenzhen iMiracle Technology Co. Ltd. (“SIT”), iMiracle (HK) Limited (“iMiracle”), Heaven Gifts International Limited (“Heaven Gifts”), YLSN Distribution LLC (“YLSN”), ECTO World LLC (“ECTO”), D&A Distribution LLC (“D&A”), UNISHOW (U.S.A.), Inc. (“UNISHOW”), SV3 LLC d/b/a MI-POD (“MI-POD”), Kingdom Vapor Inc. (“Kingdom Vapor”), and GD Sigelei Electronic Tech. Co Ltd. (“GD Sigelei”), Waterfall Holding LLC (“Waterfall”), LA Vapor, Inc. (“LA Vapor”), World Wholesale Inc. (“WWI”), G&A Wholesale Distributors Inc. (“G&A”), and Kloud King Distributors, Inc. d/b/a KKSMOKE.COM (“Kloud King” and collectively with Weiboli, SIT, iMiracle, Heaven Gifts, YLSN, ECTO, D&A, UNISHOW, MI-POD, Kingdom Vapor, GD Sigelei, Waterfall, LA Vapor, WWI and G&A, the “Defendants”). The parties entered into the EBL Agreement in connection with settlement of all disputes between them, including certain pending litigation identified in the EBL Agreement (collectively, the “Actions”) concerning U.S. trademark 5,486,616 (the “616 Trademark”) for the mark ELF in International Class 34 for use in connection with “Electronic cigarette lighters; Electronic cigarettes; Smokeless cigarette vaporizer pipe” and U.S. patent number 8,205,622 entitled “Electronic Cigarette” (the “622 Patent”). The parties to the EBL Agreement deny any other party’s allegations and claims in such litigation, do not admit liability, and desire to settle and compromise all disputes between them, including the Actions, on the terms and conditions set forth in the EBL Agreement.
Pursuant to the terms of the EBL Agreement, (i)
the Company and the Defendants agreed to dismiss the Actions with prejudice within one business day of receipt by the Company of $
On March 9, 2026, the Company entered into a settlement agreement with Boulder International Inc. to resolve patent infringement litigation related to U.S. Patent No. 8,205,622, covering Boulder’s “Pro” and “Twilight” vape devices.
Under the agreement, Boulder agreed to pay a total
settlement amount of $
In addition to the settlement payment, the Company
granted Boulder a non-exclusive, non-transferable, perpetual license to the patent. Under the license, Boulder will pay royalties of
18
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
Additionally, the Company irrevocably conveyed, transferred and assigned to iMiracle all of the Company’s right, title and interest in and to the ‘616 Trademark and all U.S. trademark registrations and trademark applications for any elf-formative marks, together with the goodwill of the business connected with the use of, and symbolized by, the Assigned Trademarks (as defined in the EBL Agreement). In furtherance thereof, the Company agreed to transfer, assign, convey and deliver to iMiracle, at no additional consideration, certain tangible and/or intangible assets materially related to and necessary to evidence and preserve the goodwill symbolized by the Assigned Trademarks, and to assign and transfer to iMiracle all of the Company’s right, title and interest in the ELF trademarks identified in the EBL Agreement. Pursuant to the terms of the EBL Agreement, within the 75-day period after the effective date of the EBL Agreement, the Company and EBL may sell off existing inventory of ELF branded products already manufactured and in stock as of the effective date of the EBL Agreement. The Company and its affiliates may not manufacture or produce any new products bearing the Assigned Trademarks, including but not limited to, any products branded, labeled, packaged or otherwise identified as “ELF” or any confusingly similar designation, at any time on or after the effective date of the EBL Agreement. The Company also agreed to, and agreed to cause its affiliates to, irrevocably withdraw, dismiss and terminate all ELF Trademark Challenge Proceedings (as defined in the EBL Agreement) within 10 business days following execution of the EBL Agreement.
The Company also agreed to file with the U.S. Patent and Trademark Office, within 14 days of execution of the EBL Agreement, a request for the express abandonment of U.S. Application Serial No. 97834845, and to irrevocably withdraw and abandon the trademark applications identified in the EBL Agreement filed with the European Union.
Pursuant to the terms of the EBL Agreement, the Company granted to Defendants a fully paid, worldwide, irrevocable, non-exclusive, perpetual license to the ‘622 Patent.
The EBL Agreement contains customary representations, warranties and covenants of the Company and the Defendants.
Also on January 30, 2026, the Company entered
into a settlement with EBL to terminate its ELF® brand license. The Company paid $
During the three months ended March 31, 2026, and March 31, 2025, the
Company received cash payments totaling $
NOTE 10: INCOME TAXES
The Company accounts for income taxes in accordance with ASC 740, “Income Taxes,” which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases.
Additionally, the Company follows the provisions of FASB ASC 740-10, “Uncertainty in Income Taxes,” which establishes recognition thresholds for tax positions. Under this standard, an entity may only recognize tax positions that meet a “more-likely-than-not” threshold. As of March 31, 2026, and December 31, 2025, the Company does not believe it has any uncertain tax positions that would require recognition or disclosure in the accompanying audited financial statements.
Income Tax Expense and Tax Liability Changes
For the three months ended March 31, 2026
and year ended December 31, 2025, the Company recorded net income (loss) before taxes of $
Uncertain Tax Positions and Penalties
For the year ended December 31, 2025, the Company
recorded a $
19
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
As of March 31, 2026, the Company calculated tax expense of $
Income Tax Provision
As of March 31, 2026, the Company’s statutory
federal income tax rate was
| Three Months Ended March 31, | Three Months Ended March 31, | |||||||
| Income tax expense | 2026 | 2025 | ||||||
| Income tax expense (credit) at U.S. federal rate | $ | $ | ( | ) | ||||
| State income taxes, net of federal benefit | $ | ( | ) | |||||
| Valuation allowance | ||||||||
| Provision for income tax | $ | $ | ||||||
For the three months ended March 31, 2026, the Company recorded a provision
for income tax expense of $
The following table presents the provision for income taxes, statutory federal income tax rate, effective tax rate, and reconciliation for the three months ended March 31, 2026, and 2025:
| Three Months Ended March 31, | Three Months Ended March 31, | |||||||
| 2026 | 2025 | |||||||
| Tax (credit) at statutory federal income tax rate | % | ( | )% | |||||
| State income taxes, net of federal benefit | % | ( | )% | |||||
| Valuation allowance | % | % | ||||||
| Effective tax rate | % | % | ||||||
NOTE 11: SUBSEQUENT EVENTS
On April 21, 2026, R.J. Vapor Co. (RJR) filed a lawsuit against VPR Brands, LP, , seeking a declaratory judgment that its Vuse e-cigarettes do not infringe on VPR’s "auto-draw" vapor technology patent. RJR initiated this action in Delaware federal court after VPR threatened litigation regarding patents related to air-activated vaping.
On April 28, 2026, the General Partner executed the Third Amendment (the “Third Amendment”) to the Partnership Agreement, in order to amend the terms of the Company’s Class A preferred units.
The designation, powers, preferences and rights of the Class A preferred units and the qualifications, limitations and restrictions thereof are summarized as follows:
Number and Stated
Value. The number of authorized Class A preferred units is
20
VPR BRANDS, LP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
The Third Amendment had
the effect of increasing the number of authorized Class A preferred units from
Rights. Except as set forth in the Third Amendment, each Class A preferred unit has all of the rights, preferences and obligations of the common units as set forth in the Partnership Agreement and will be treated as a common unit for all other purposes of the Partnership Agreement.
Dividends. The Class A preferred units have no mandatory dividend or distribution rights, and any distributions on or with respect to the Class A preferred units will be at the sole discretion of the Company.
The Third Amendment had the effect of eliminating an annual dividend.
Voting. The Class A preferred units have no voting rights other than as required by applicable law, and, for the avoidance of doubt, the Class A preferred units have no management rights or other governance participation of any kind.
Liquidation. The Class A preferred units have no preferential rights on any liquidation or dissolution of the Company, and rank pari passu with the Company’s common units on any liquidation or dissolution of the Company.
The Third Amendment had the effect of eliminating preferential rights of the Class A preferred units upon liquidation or dissolution of the Company equal to any accrued by unpaid dividends.
Non-transferable. The Class A preferred units are not transferable without the prior written consent of the Company, to be given or withheld in the sole discretion of the Company.
Conversion Rights. Each
Class A preferred unit is convertible into common units of the Company at any time following the date on which the closing price of the
common units for the preceding
The Third Amendment had
the effect of revising the conversion rights of the Class A preferred units. Prior to adopting the Third Amendment, the Class A preferred
units were convertible, at the option of the holder thereof, into a number of common units equal to (x) the then-stated value of $
21
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the financial condition and results of operations of VPR Brands, LP (“VPRB” or the “Company”) should be read in conjunction with our unaudited condensed financial statements and the accompanying notes thereto included elsewhere in this Quarterly Report on Form 10-Q. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,” and similar terms refer to the Company. This Quarterly Report on Form 10-Q includes forward-looking statements, as that term is defined in the federal securities laws, based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Words such as “anticipate,” “estimate,” “plan,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions are used to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Reference is made to the “Risk Factors” section of the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2026, as the same may be updated from time to time.
Overview
We are a company engaged in the electronic cigarette, electronic cigar, personal vaporizer and pocket lighter industry. We own a portfolio of electronic cigarette, personal vaporizer and pocket lighter patents, and several trademarks, which intellectual property forms the basis for our efforts to:
| ● | Design, market, license, and distribute a line of vaporizers; |
| ● | Design, market and distribute a line of e-liquids under the “HELIUM” brand; |
| ● | Design, market and distribute a line of vaporizers for essential oils, concentrates, and dry herbs under the “HONEYSTICK” brand; |
| ● | Design, market and distribute a line of cannabidiol (“CBD”) products under the “GOLD LINE” brand; |
| ● | Design, market and distribute electronic cigarettes and popular vaporizers under the KRAVE brand; |
| ● | Prosecute and enforce our patent and trademark rights; |
| ● | License our intellectual property; and |
| ● | Develop private label manufacturing programs. |
Recent Developments
Effective March 2026, Greg Pan ceased to be a member of the General Partner. Accordingly, Kevin Frija, our Chief Executive Officer, is now the sole member of the General Partner.
On April 28, 2026, Soleil Capital Management LLC, the Company’s general partner (the “General Partner”) executed the Third Amendment (the “Third Amendment”) to the Company’s Limited Partnership Agreement, as amended (the “Partnership Agreement”), in order to amend the terms of the Company’s Class A preferred units.
The designation, powers, preferences and rights of the Class A preferred units and the qualifications, limitations and restrictions thereof are summarized as follows:
Number and Stated Value. The number of authorized Class A preferred units is 250,000,000. Each Class A preferred unit will have a stated value of $1.00 (the “Stated Value”).
The Third Amendment had the effect of increasing the number of authorized Class A preferred units from 1,000,000 to 250,000,000, and decreasing the stated value from $2.00 to $1.00 per unit.
Rights. Except as set forth in the Third Amendment, each Class A preferred unit has all of the rights, preferences and obligations of the common units as set forth in the Partnership Agreement and will be treated as a common unit for all other purposes of the Partnership Agreement.
22
Dividends. The Class A preferred units have no mandatory dividend or distribution rights, and any distributions on or with respect to the Class A preferred units will be at the sole discretion of the Company.
The Third Amendment had the effect of eliminating an annual dividend.
Voting. The Class A preferred units have no voting rights other than as required by applicable law, and, for the avoidance of doubt, the Class A preferred units have no management rights or other governance participation of any kind.
Liquidation. The Class A preferred units have no preferential rights on any liquidation or dissolution of the Company, and rank pari passu with the Company’s common units on any liquidation or dissolution of the Company.
The Third Amendment had the effect of eliminating preferential rights of the Class A preferred units upon liquidation or dissolution of the Company equal to any accrued by unpaid dividends.
Non-transferable. The Class A preferred units are not transferable without the prior written consent of the Company, to be given or withheld in the sole discretion of the Company.
Conversion Rights. Each Class A preferred unit is convertible into common units of the Company at any time following the date on which the closing price of the common units for the preceding 20 consecutive trading days has equaled or exceeded $1.15 (the “Conversion Commencement Date”), subject to adjustment as set forth in the Third Amendment (the “Conversion Price”); provided, however, that if the Conversion Commencement Date has not occurred on or before July 31, 2030, the Class A preferred units will not be convertible into common units. Each Class A preferred unit is convertible into a number of conversion units equal to (x) the Stated Value, divided by the Conversion Price, subject to a 4.99% equity blocker, which may be waived by the Class A preferred unit holder upon not less than 61 days’ prior notice to the Company.
The Third Amendment had the effect of revising the conversion rights of the Class A preferred units. Prior to adopting the Third Amendment, the Class A preferred units were convertible, at the option of the holder thereof, into a number of common units equal to (x) the then-stated value of $2.00 plus any accrued and unpaid dividends, divided by (y) the conversion price, equal to 85% of the 5-trading day VWAP, subject to a 4.99% equity blocker that could be waived by the Class A preferred unit holder upon not less than 61 days’ prior notice to the Company.
Financial Condition
For the three months ended March 31, 2026 and 2025, we generated revenue of $580,071 and $885,283, respectively, reported net income (loss) before taxes of $2,590,821 and $(290,864), respectively, and net cash provided by (used in) operating activities of $2,574,493 and $(333,358) at March 31, 2026 and 2025, respectively. As noted in our accompanying unaudited condensed financial statements, we reported an accumulated deficit of $6,850,017 and $8,790,579 as of March 31, 2026 and December 31, 2025, respectively.
Results of Operations
Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025
Revenue
Our revenue from product sales for the three months ended March 31, 2026 and 2025 was $580,071 and $885,283, respectively. Royalty revenue for the three months ended March 31, 2026, and 2025 was $0 and $48,045, respectively. The decrease in product and royalty revenue was a result of the business trend experienced since 2024 of declining customer sales and licensing of intellectual property.
Cost of Sales
Cost of sales for the three months ended March 31, 2026, and 2025 was $441,497 and $712,386, respectively. Gross margins stabilized at 24% for the three months ended March 31, 2026, and 2025.
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Operating Expenses
Operating expenses for the three months ended March 31, 2026, were $603,041, as compared to $496,459 for the three months ended March 31, 2025. The increase of $106,580 was a result of increases in professional fees and trade show costs, offset by reduction in marketing expense.
Other Income (Expense)
Other income for the three months ended March 31, 2026, was $3,055,288, compared to other expense of $(15,347) for the three months ended March 31, 2025, representing an increase of $3,070,635, due to the cash received in January 2026 from the EBL settlement.
Net Income (Loss)
Net income for the three months ended March 31, 2026, was $1,940,561, compared to net (loss) of $(290,864) for the three months ended March 31, 2025. The increase in net income was due to the EBL settlement.
Liquidity and Capital Resources
The following table sets forth a summary of our net cash flows for the periods indicated:
| For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net cash flows provided by (used in) operating activities | $ | 2,574,493 | $ | (333,358 | ) | |||
| Net cash flows used in financing activities | $ | (12,891 | ) | $ | (75,792 | ) | ||
| Net cash flows used in investing activities | $ | - | (16,000 | ) | ||||
Cash provided by operating activities was $2,574,493 for the three months ended March 31, 2026, compared to cash used in operating activities of $333,358 for the three months ended March 31, 2025. The increase in cash provided by operating activities was primarily attributable to net income of $1,940,561 during the three months ended March 31, 2026, as compared to a net loss of $290,864 during the corresponding prior-year period. The increase was further driven by favorable changes in working capital, including decreases in accounts receivable and inventory, as well as an increase in tax liabilities. These increases were partially offset by decreases in accounts payable and accrued expenses and vendor deposits.
Net cash used in financing activities was $12,891 for the three months ended March 31, 2026, compared to $75,792 for the three months ended March 31, 2025. The decrease in cash used in financing activities was primarily due to lower repayments of convertible notes and notes payable during the current period.
Assets
At March 31, 2026, and December 31, 2025, we had total assets of $4,067,822 and $1,593,684, respectively. Assets primarily consisted of the cash accounts held by the Company, inventory, vendor deposits, accounts receivable and a right-of-use asset. During the three months ended March 31, 2026, the Company’s accounts receivable decreased by $60,945, and inventory decreased by $82,499, as compared to December 31, 2025.
Liabilities
On March 31, 2026, and December 31, 2025, we had total liabilities of $2,449,905 and $1,904,637, respectively. The increase in liabilities was mainly due to the income tax provision of $650,260 recorded for the period ended March 31,2026.
Availability of Additional Funds
Our capital requirements going forward will consist of financing our operations until we are able to reach a level of revenue and gross margins adequate to equal or exceed our ongoing operating expenses. We do not have any credit agreement or source of liquidity immediately available to us.
Since inception, our operations have primarily been funded through proceeds from equity and debt financing. At March 31, 2026, we had $2,686,947 of cash on hand. Although we believe that we have access to capital resources, there are no commitments in place for new financing as of the filing date of this Quarterly Report on Form 10-Q and there can be no assurance that we will be able to obtain funds on commercially acceptable terms, if at all. We expect to have ongoing needs for working capital in order to (a) fund operations; plus (b) fund strategic acquisitions. To that end, we may be required to raise additional funds through equity or debt financing. However, there can be no assurance that we will be successful in securing additional capital. If we are unsuccessful, we may need to (a) initiate cost reductions; (b) forego business development opportunities; (c) seek extensions of time to fund its liabilities, or (d) seek protection from creditors.
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In addition, if we are unable to generate adequate cash from operations, and if we are unable to find sources of funding, it may be necessary for us to sell all or a portion of our assets, enter into a business combination, or reduce or eliminate operations. These possibilities, to the extent available, may be on terms that result in significant dilution to our unitholders or that result in our unitholders losing all of their investment in our Company.
If we are able to raise additional capital, we do not know what the terms of any such capital raising would be. In addition, any future sale of our equity securities would dilute the ownership and control of your units and could be at prices substantially below prices at which our units currently trade. Our inability to raise capital could require us to significantly curtail or terminate our operations. We may seek to increase our cash reserves through the sale of additional equity or debt securities. The sale of convertible debt securities or additional equity securities could result in additional and potentially substantial dilution to our unitholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations and liquidity. In addition, our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties.
Our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which contemplate our continuation as a going concern and the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the unaudited condensed financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed financial statements do not include any adjustment that might result from the outcome of this uncertainty.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company’s financial condition, revenue or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S. GAAP. Our significant accounting policies are described in notes accompanying the financial statements. The preparation of the financial statements requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosure of contingent assets and liabilities. Estimates are based on information available as of the date of the financial statements, and accordingly, actual results in future periods could differ from these estimates. Significant judgments and estimates used in the preparation of the financial statements apply critical accounting policies described in the notes to our financial statements.
We consider the recognition and related assumptions used in determining the collectability of accounts receivable and the realizability of the deferred tax assets and liabilities to be most critical in understanding the judgments that are involved in the preparation of our financial statements.
Together with our critical accounting policies set out below, our significant accounting policies are summarized in Note 2 to our unaudited condensed financial statements as of and for the three months ended March 31, 2026.
Accounts Receivable
We recognize an allowance for expected credit losses in accordance with Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses, issued by the Financial Accounting Standards Board (“FASB”). This ASU establishes a current expected credit loss model, which requires us to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.
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To estimate expected credit losses, we segregated our receivables into four risk-based categories, each reflecting distinct credit risk characteristics. A loss rate was then applied to each category based on historical experience and anticipated losses given the associated risk factors.
An allowance for credit losses is recorded through a provision for bad debts charged to earnings. The evaluation of expected credit losses is inherently subjective and requires management to make estimates that may be subject to significant revision as additional information becomes available.
As of March 31, 2026, and December 31, 2025, the Company had an allowance for an expected credit loss of $101,602 and $105,792, respectively.
Income Taxes
The Company has recorded income taxes in accordance with ASC 740, “Income Taxes,” which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Additionally, the Company follows the provisions of FASB ASC 740-10, “Uncertainty in Income Taxes,” which establishes recognition thresholds for tax positions. Under this standard, an entity may only recognize tax positions that meet a “more-likely-than-not” threshold. As of March 31, 2026 and December 31, 2025, the Company does not believe it has any uncertain tax positions that would require recognition or disclosure in the accompanying unaudited condensed financial statements.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that may have an impact on the Company’s accounting and reporting.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This update aims to enhance transparency for users of financial statements by requiring public business entities to disaggregate specific expense categories. The update mandates disclosures in the notes to financial statements, detailing the composition and trends of key expense categories within major income statement captions. These enhanced disclosures are expected to help investors more effectively assess the entity’s performance, understand its cost structure, and make more accurate forecasts of future cash flow. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the potential impact of ASU 2024-03 on its financial reporting and disclosures.
In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which revises the effective date of ASU 2024-03 (on disclosures about disaggregation of income statement expenses) “to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.” Entities within the ASU’s scope are permitted to early adopt the ASU. The Company is currently evaluating the potential impact of ASU 2024-03 on its financial reporting and disclosures.
In July 2025, the FASB issued ASU 2025-05, Financial Instrument-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU affects entities that apply the practical expedient and accounting policy election (if applicable) when estimating expected credit losses on current accounts receivable and/or current contract assets arising from transactions under Topic 606, including those assets acquired in a transaction accounted for under Topic 805, Business Combinations. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the potential impact of ASU 2025-05 on its financial reporting and disclosures.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company, we are not required to include disclosure under this item.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures as of March 31, 2026. Based on such review and evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2026, the disclosure controls and procedures were not effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, (a) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (b) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure, because of a continuing material weakness in our internal control over financial reporting, as described below.
The Company did not maintain an effective financial reporting process to prepare financial statements in accordance with U.S. GAAP. Specifically, our process lacked timely and complete financial statement reviews and procedures to ensure all required disclosures were made in our financial statements. Also, the Company lacked documented procedures, including documentation related to testing of internal controls and entity-level controls, disclosure review, and other analytics. Furthermore, the Company lacked sufficient personnel to properly segregate duties.
A material weakness (within the meaning of PCAOB Auditing Standard No. 5) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness; yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting.
Remedial Efforts Related to the Material Weakness in Internal Control
In an effort to address the material weakness, we have implemented, or are in the process of implementing, the following remedial steps:
| ● | We intend to establish an audit committee of the board of directors as soon as practicable. We envision that the audit committee will be primarily responsible for reviewing the services performed by our independent auditors, evaluating our accounting policies and our system of internal controls. |
| ● | We intend to establish an internal audit function and engage a public accounting firm to perform internal audit services under an outsourcing arrangement. We intend for the internal audit service provider to review the policies, procedures and systems to address the material weakness. |
| ● | In addition to supervising all financial aspects of the Company, our Chief Financial Officer is also supervising our Information Technology (“IT”) functions to better facilitate the coordination and development of improved systems to support our financial reporting process. |
| ● | In furtherance of timely and complete financial statement reviews and procedures to ensure all required disclosures are made in our financial statements and promoting the segregation of duties, we have (i) hired experienced accounting personnel and expect to hire additional experienced accounting personnel, (ii) hired staff to handle the increased workload associated with the reporting structure in place and continue to recruit additional staff in key areas including financial reporting and tax accounting as well as we have engaged temporary staff and (iii) hired consultants to assist in achieving accurate and timely reporting, including hiring additional consultants to assist in the development and enhancement of IT infrastructure systems to support accounting. |
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| ● | We have provided and will continue to provide training to our finance and accounting personnel for timely and accurate preparation and management review of documentation to support our financial reporting and period-end close procedures including documentation related to testing of internal controls and entity-level controls, disclosure review, and other analytics. |
| ● | We have been conducting and continue to conduct the assessment and review of our accounting general ledger system to further identify changes that can be made to improve our overall control environment with respect to journal entries. We are continuing to implement more formal procedures related to the review and approval of journal entries. |
| ● | We have been formalizing the periodic account reconciliation process for all significant balance sheet accounts. We are continuing to implement more formal review of these reconciliations by our accounting management and we will increase the number of supervisory personnel to ensure that reviews are performed. |
We believe these additional internal controls will be effective in remediating the material weakness described above; however, we may determine to modify the remediation plan described above by adding remedial steps to or modifying or no longer pursuing (if determined to be unnecessary in remediating the material weakness) the remedial steps set forth above. Until the remediation steps set forth above are fully implemented, the material weakness described above will continue to exist. Notwithstanding, through the use of external consultants and the review process, management believes that the financial statements and other information presented herewith are materially correct.
The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. However, the Company’s management, including its CEO and CFO, does not expect that its disclosure controls and procedures will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 1A. RISK FACTORS
Risk factors describing the major risks to our business can be found under Item 1A, “Risk Factors”, in our Annual Report on Form 10-K for the year ended December 31, 2025, as the same may be amended from time to time. There has been no material change in our risk factors from those previously discussed in the Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable to our operations.
ITEM 5. OTHER INFORMATION
| (a) | None. |
| (b) | There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since the Company last provided disclosure in response to the requirements of Item 407(c)(3) of Regulation S-K. |
| (c) | During the quarter ended March 31, 2026, no director or officer of the Company |
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ITEM 6. EXHIBITS
| * | Filed herewith |
| ** | Furnished herewith |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| VPR BRANDS, LP | ||
| Dated: May 15, 2026 | By: | /s/ Kevin Frija |
| Chief Executive Officer | ||
| (principal executive officer, | ||
| principal financial officer and | ||
| principal accounting officer) | ||
31
Exhibit 31.1
CERTIFICATIONS
I, Kevin Frija, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 of VPR Brands, LP; |
| 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. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data 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 controls over financial reporting. |
| Date: May 15, 2026 | /s/ Kevin Frija |
| Kevin Frija | |
| Chief Executive Officer | |
| (principal executive officer) |
Exhibit 31.2
CERTIFICATIONS
I, Kevin Frija, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 of VPR Brands, LP; |
| 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. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls 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 that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data 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 controls over financial reporting. |
| Date: May 15, 2026 | /s/ Kevin Frija |
| Kevin Frija | |
| Chief Executive Officer | |
| (principal financial officer) |
Exhibit 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 VPR Brands, LP (the “Company”) on Form 10-Q for the quarter ended March 31, 2026 as filed with the Securities and Exchange Commission (the “Report”), I, Kevin Frija, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 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 result of operations of the Company. |
| Date: May 15, 2026 | /s/ Kevin Frija |
| Kevin Frija | |
| Chief Executive Officer | |
| (principal executive officer and principal financial officer) |