Breaking the silence of two months, VAPE HOLDINGS INC (OTCMKTS:VAPE) released a new PR, which fetched the attention of investors immediately. Following the corporate update 12.74 million shares changed hands on Friday’s trading session as against the average share volume of 1.05 million. The intense buying sent the share to gain as much as 51.52% and close the week at $0.0500. Despite the remarkable gain VAPE is still sitting more than 40% lower than its highs from two months ago.
The buzz
VAPE HOLDINGS did announce several promising developments last week. The company has streamlined its operations, reduced the expenses and now intends to release a number of products by the end of this year. Despite all this measures, it would be difficult for the company to deal with the dismal financials.
As per the latest financial report, as of June 30, 2015, VAPE HOLDINGS reported cash of $134,000, total current assets of $818,000 and current liabilities of $1.3 million. The revenue came at $282,000 while net loss in the quarter was $436,000. In fact, the revenue declined 29% sequentially and 22% compared to the same period last year.
The concerns
There is a lot more to worry about the reported liabilities of $1 million as a large part of it is formed of convertible notes, which if converted into company’s stock can result in massive dilution. As per the last Form 8-K, since August 26, 2015, almost $227,000 of convertible debt has been converted into over 5.1 million shares.
The number of outstanding shares as a whole has surged to over 18 million as of September 29, 2015 from 11.7 million as of June 30. Also, the recent daily volumes of shares traded hints that the outstanding number could have increased by now. The problems surrounding VAPE HOLDINGS are extremely grave and the company has a long way to cover if it wants to get over them.
VAPE HOLDINGS INC (OTCMKTS:VAPE) ended the last session of the previous week with a bang as it finished with a huge gain of 51.52%. The volume of the day surged to 12.7 million against the daily average of 2 million only, also the highest daily volume in the last 12 months. The stock can be seen in the grips of a major bear market for a long time now and with the price mostly kissing the lower boundary of the corrective channel, expecting any real turnaround seems difficult. On the other hand, the surge in volume initially suggests some bottom pickers at work.
