Vapor Group Inc (OTCMKTS:VPOR) continues to wallow away in triple zero land. This is however an exciting story developing in sub penny land that trades big volume and has been highly successful in attracting a loyal shareholder base.
VPOR has experienced explosive revenues growth reporting $4,481,839 in sales for 2014 up well over 100% from $1,991,023 the year before. The stock has come into favor with Investors who site the cancelled RS and the Company’s promise of no more conversions.
Vapor Group Inc (OTCMKTS:VPOR) sells high quality, vaporizers and e-cigarette brands which use state-of-the-art electronic technology and specially formulated, “Made in the USA” e-liquids, which may or may not contain nicotine. It offers a range of products with unique e-liquid flavors that is unmatched in our industry. Its products are marketed under the Vapor Group, Total Vapor, Vapor 123 and Vapor Products brands. It sells nationwide through distributors, wholesalers and directly to consumers through its own websites and direct response advertising.
All of its E-Cigarettes consist of a long-life battery, a heating element, a cartridge filled with an “e-liquid” and an atomizer which when heated, vaporizes the e-liquid. Because E-Cigarettes are not “lit” like regular cigarettes, they don’t create flame, smoke from burning, ash, tar, noxious fumes or leftover “cigarette butts.” As a result, they may be used virtually anywhere.
According to the Company their e-liquids are unsurpassed by any competitor in terms of purity, or quality. The e-liquids are formulated and mixed in the U.S. by an FDA registered laboratory by degreed professionals, in accordance with cGMP guidelines (21 CFR part 111).
The ingredients in its e-liquid are quarantined before use, and pass an independent, third party laboratory test for purity. They consist of United States Pharmacopeia (“USP”) grade and kosher. Its lab carefully tests each batch of its e-liquid by high pressure liquid chromatograph to verify that it has the right levels of ingredients. The company’s high quality is a fundamental pillar of its competitive advantage.
VPOR continues to report spectacular revenue growth; as of the 9 month ended 2014, VPOR not only posted record revenues, but it increased year over year revenues by 286%. This is very impressive especially the growth rate of 27.7% between 2Q to 3Q 2014.
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Quarter by quarter revenues last year where:
Revenues Gross profits
1Q $966,411 1Q $645,806
2Q $1,023,365 2Q $508,271
3Q $1,307,524 3Q $877,537
Despite the record growth in revenues VPOR has wallowed away in sub penny stock land for months as debt conversions ruled due to the heavy debt load of $4 million the Company carried on their books according to the 10Q from November 14.
Clearly this has been a focus point for management who has reported several debt reductions recently; on February 19 they announced they had paid $148,000 (prox.) to prepay in full before maturity, and before the date of any potential note conversion to stock, a second convertible promissory note, dated October 2014. The note paid by the Company was in principal amount in excess of $100,000. This payment constitutes the second such prepayment of a convertible promissory note of over $100,000 in the last two weeks, each before the note’s maturity and the date of its convertibility. Since the first of the year, the Company has paid in cash over $200,000 for principal, interest and fees to retire two convertible promissory notes.
According to several posters on IHUB who have done extensive due diligence on VPOR the total debt reduced as of February 19 is in the range of 2.6 to 2.7 million. (unverified)
CEO Dror Svorai said, “Last week we made the first such prepayment and now we made the second. As I previously stated, we are committed to the reduction of our overall convertible promissory note balances. There will be more prepayments to come.”
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Currently moving up off its all-time lows of $0.0008 VPOR does still carry several million in debt on the books and has suffered heavy dilution in the past. But this is an exciting story developing in small caps; the Company continues to report record revenue growth and has been very successful in developing a massive and loyal shareholder base that swears this one goes higher. 10K is due today. We will be updating on VPOR when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with VPOR.
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Disclosure: we hold no position in VPOR either long or short and we have not been compensated for this article.