Vapor Group Inc (OTCMKTS:VPOR) Heads Down

Interestingly enough, Vapor Group Inc (OTCMKTS:VPOR)’s latest financial report didn’t really make much of a splash when it came out. However once the PR praising the company’s achievements hit the web the ticker was headed up in no time, only to fall 10.28% in today’s early trading.

Truth be told, the financial section of the 10-Q VPOR filed for the period ended Sept 30, 2014 didn’t look all that bad. Overall, it show that the company’s financial situation was pretty decent:

  • Cash – $859 thousand
  • Total current assets – 3.5 million
  • Total Current Liabilities – 4.1 million
  • Quarterly Net Revenues – $1.3 Million
  • Quarterly Gross Profit – $877million
  • Quarterly Net Loss – $184 thousand

To put things into perspective – gross profit has tripled in comparison with the same period last year, but unfortunately general and administrative expenses have quadrupled, which accounts for VPOR‘s net loss.

Still, the report is pretty good by the standards of the OTC Markets… until you reach the “ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS” section, located on page 34 to 37.

That particular part of the report shows some pretty horrible numbers. Promissory notes of the Company, dated June 20, 2012, converting at a tiny fraction of the stock’s price at the time. An alarming amount of dilution seems to have been plaguing VPOR investor value in the reported quarter, just like it has in the past.

Investors should probably take that into account when making up their mind about VPOR stock.


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