Vega Biofuels Inc (OTCMKTS:VGPR) Pushes Up Fueled by MJ Hype
On December 23, 2013, Vega Biofuels Inc (OTCMKTS:VGPR) issued a year-end update to their shareholders in which they said that they are making some progress with their torrefaction plant in South Carolina. They also announced that they expect to have the facility ready by mid-2014 and promised to give out more details in January. January came and went, but VGPR issued no further information on the bio-coal plant.
Instead, on February 28, they said that they are expanding their business plan. Apparently, they will still pursue the opportunities presented by the clever bio-coal fuel, but they also plan on producing something called biochar.
We learn from the press release that biochar is made using the same torrefaction technology and, when applied to farm lands, it improves the soil’s health immensely. If the PR were to stop there, it wouldn’t have had that much of an effect on the stock performance. VGPR, however, decided to say that biochar can be used for growing hemp and marijuana and that, in turn, pushed the ticker out of the triple-zero levels and sent it flying high.
Yesterday, they made another announcement according to which they have signed and agreement for the acquisition of an enterprise dealing with biochar for marijuana growers and, somewhat predictably, VGPR added another 64%. It closed the session above the $0.005 per share for the first time since June 2012 and registered a dollar volume of around $2.5 million.
Clearly, there’s no shortage of optimism among investors and right now, there’s a lot of money at stake. But, apart from the hype, is there anything else that could support VGPR in the long run?
If there is, it’s certainly not present in the company’s financial statements. The 2013 report was published on February 12 and it presents us with the following figures:
- current assets: $18 thousand in cash
- current liabilities: $134 thousand
- no revenue since inception
- yearly net loss: $120 thousand
This was the company’s situation as of December 31, 2013 – just eight days after Mr. Michael Molen, VGPR‘s CEO, promised to have the bio-coal factory ready within the next six months.
And since we mentioned Mr. Molen, we should probably note that a person by the same name was once at the helm of a company called Sanswire Corp (now known as World Surveillance Group Inc (OTCMKTS:WSGI)). While he was there, there were some people who were not particularly happy with his business practices.
The link above isn’t really helping with the company credibility and neither is the fact that VGPR‘s mailing address is a P.O. Box located somewhere in Norcross, Georgia.
Doing a lot of due diligence and carefully considering the risks before committing to an investment is absolutely essential.
VGPR wasn’t the only marijuana-related stock to climb the charts during yesterday’s session. Fortitude Group Inc (OTCMKTS:FRTD) made an impressive 29% jump while logging a dollar volume of nearly $2.4 million. Enertopia, Inc. (OTCMKTS:ENRT), on the other hand, slipped and fell by more than 16% . It closed the day at $0.53 per share.
