VaporBrands International Inc (OTCMKTS:VAPR) Gets Woken Up from Hibernation

As the name would suggest, VaporBrands International Inc (OTCMKTS:VAPR)’s business plan is aimed at developing, marketing, and selling vaporizers (more specifically, electronic cigarettes). There’s certainly a market for those clever devices and VAPR did manage to sign a few contracts which gave them the right to distribute some of the brands in the industry.

Unfortunately, things weren’t going along very well. The company’s financial statements from years gone by show us that revenues were dismal while the losses were rather big. In April 2013, they lost the license to use the VAMP brand which was a big hit to VAPR‘s shaky situation. Investors lost interest in the ticker completely and it plummeted from around $0.12 per share all the way to less than $0.03. Something had to be done.

VAPR‘s former CEO stepped down from his position and Ms. Wendy Haviland took the helm. This announcement, however, didn’t really set the market on fire. In December, the company came up with a press release which informed us that VAPR have secured some much needed financing from an unnamed investment group, but once again, investors seemed unimpressed.

Yesterday, another announcement hit the wire and this time, the response was absolutely explosive. VAPR informed us that they have signed a letter of intent to form a joint venture with Marijuana, Inc. (a subsidiary of Hemp, Inc (OTCMKTS:HEMP)).

If the joint venture materializes, HEMP will help VAPR develop special vaporizers that can be used with marijuana and they will also assist them with the distribution and marketing efforts for the current products.

The interest from investors was so great that at the moment, VAPR‘s website seems down due to exceeded bandwith. Predictably, the stock was sent into the stratosphere. More than 5 million shares changed hands while the price jumped up by as much as 172% and finished the day at $0.245 per share. Traders seem mightily excited about the future partnership between the two penny stocks, but should they be?

HEMP is certainly a better recognized player in OTC-land, but even so, they do have some issues. Their latest financial statement, for example shows that the working capital deficit exceeds $920 thousand and although they have registered some growth in terms of revenues, a positive bottom line is still nowhere in sight.

As for VAPR, their Q3 results are pretty disappointing. Here’s a summary of the most important figures:

cash: $10 thousand
current assets: $26 thousand
current liabilities: $217 thousand
quarterly revenues: $326
accumulated deficit: $5.7 million

With no details around the financing agreement from December, estimating their chances of success is nigh on impossible.

All in all, the future should tell us if something is to come out of the partnership between HEMP and VAPR. In the meantime, the pressure of the inflated price might prove to be too much for the latter’s stock.

What’s more, there might be some people who can take advantage of its current values. VAPR say in their financial statement that back in September 2013, they issued $20 thousand worth of notes that can be turned into common stock at any time. The conversion rate stands at $0.01 per share.

Another OTC company dealing with the production and marketing of personal vaporizers is mCig Inc (OTCBB:MCIG). Their electronic cigarettes can also be used with marijuana and because of this, their stock has made a remarkable run over the last few weeks. It would appear however, that the $0.30+ levels proved to be too much for the ticker and yesterday, MCIG closed the session with a 9% correction.