Georgi Kamburov

How Low Will Vapor Corp (OTCMKTS:VPCO) Go?

by Georgi Kamburov April 14, 2016

Things are turning from bad to worse for the stock of Vapor Corp (OTCMKTS:VPCO, VPCO message board). On Tuesday the company fell below its pre-split price levels, on March 9 they did a 1-for-70 reverse split, but instead of slowing down its downwards course the losses are only getting bigger. Yesterday the stock crashed by another 45% and closed at $0.0011. At this rate the company will soon find itself trading in the triple-zero price ranges.

A prospect that is further supported by the fact that yesterday's session saw investors shift nearly 108 million of the company's shares. In order to understand the significance of that number let's remind you that immediately after the aforementioned reverse split VPCO were left with approximately 13.9 million shares. Despite the standstill agreement with 85% of the Series A warrant holders the issuance of shares through the cashless exercise of warrants continued and as of March 25 the O/S had nearly doubled. The annual report that was filed last Friday revealed that as of April 6 VPCO's outstanding shares had reached 64.9 million. Well, yesterday's daily volume is 40% higher than that.The dilution is more than likely not going to end any time soon - nine days ago VPCO had over 1 million series A warrants still outstanding that if exercised would require the issuance of 21.1 billion shares, and that number was based on a share price of $0.0037!

As a company that until recently was trading on the NASDAQ exchange VPCO still have financials rarely seen on the OTC market. The company finished 2015 with:

• $27.2 million cash
• $29.6 million total current assets
• $46.8 million total current liabilities
• $10.75 million annual sales
• $1.8 million net income

Don't get overly encouraged by the positive bottom line, though. Compared to 2014 the reported sales are down by close to 33% while the operating loss has more than doubled, reaching $28.5 million.

With the second amendment of the standstill agreement, which allowed the exercise of additional warrants, and the reverse split at a ratio ranging from 1-for-10000 and 1-for-20000 that could be implemented at any point prior to April 15, 2017, the risks surrounding VPCO get even scarier. Approach the stock with extreme caution and only after doing thorough due diligence. 

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