Davie, FL – November 17, 2014– Vapor Group, Inc. (OTC.QB: “VPOR”), (the “Company” or “Vapor Group”), today released a letter to shareholders from its President and CEO, Dror Svorai. In the letter, Dror Svorai discusses the results for the first 9 month of 2014 and states what he expects for the Company in the year ahead.
For your Company, the beginning nine months of 2014 continued the positive trend established in 2013. We expect the remainder of 2014 and all of 2015 to exemplify even further growth and positive results for our business.
First, as reported in our 10-Q, for the nine months of 2014, our revenues continued to grow, reaching $3,299,300, an increase of $2,444,096 or 286% for the same period in 2013. Moreover, for all of calendar year 2013, we had gross revenues (audited) in excess of $1,975,000 – so in the first nine months of 2014 we have already far exceeded our entire revenue of last year. Overall, a significant accomplishment and tribute to our hardworking and innovative staff in a period in which we have seen many of our competitors struggling to sustain their business.
Second, we have recently launched a line of low-cost, affordable vaporizers and accessories, including one low-price-point vaporizer in a blister pack, and a “limited edition” series as well for the holiday season. These products have been enthusiastically embraced by the exploding markets in Colorado, Washington and elsewhere for high quality, dependable vaporizers for dry herb, liquid and wax applications. In each of these regions, we have begun a successful, geographically broad sell-in.
In the State of Colorado, we have established statewide distribution of this vaporizer line, and in fact have several of our proprietary line being “private labelled” for numerous dispensaries across the State. As a result, in Colorado, we are rapidly expanding our month-over-month revenues.
In terms of marketing, for all our products, we have greatly increased our online presence through Company websites, expanded our salesforce with highly experienced staff sophisticated in selling to national distributors, and developed unique product promotions and methods of product trial to gain market share and penetration.
In July we began the process to franchise our “Total Vapor” store concept in Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Virginia, North Carolina, and Washington D.C. Each of these market areas continues to represent great sales potential for e-cigarettes and our other products. To date, the process continues on track with the preparation of regulatory federal and State filings and other documents. We plan to have our first franchised stores open in early 2015.
All the above rapid growth consumes not only time and energy, but capital. During 2014, we have invested heavily in new product development, marketing and distribution, inventory and internal systems. As a new, rapidly growing business, our cash needs have month-over-month exceeded our cash flow such that we have looked to outside financing sources for the capital necessary to fuel our growth. Important to understand is that the terms of such agreements require us to maintain a reserve of unissued shares adequate to protect any future conversion rights of the holder. Such reserves are based on our stock’s market price such that the Company is required to adjust the reserve in relation to stock market price fluctuations. Because of recent price volatility, we have had to increase our total authorized shares to maintain such an adequate reserve in order to avoid a “technical” default under such agreements, which would cripple our ability to fund future expansion.
We believe that by mid-2015, we will be able to reduce our current debt burden significantly and perhaps even eliminate it entirely, as the result of the continued, accelerated revenues that we are producing month to month.
We think that as a shareholder, long term, you will be satisfied with the results of our business and in the overall increase in the value of your company. We expect 2015 to be a “blockbuster” year for us, including the announcement of several new initiatives and patent pending new products that we now have in the planning stages.
Very truly yours,
President and CEO
Vapor Group, Inc.
About the Vapor Group
Vapor Group, Inc., www.vaporgroup.com, is in the business of designing, developing, manufacturing and marketing high quality, vaporizers and e-cigarette brands which use state-of-the-art electronic technology and specially formulated, “Made in the USA” e-liquids, which may or may not contain nicotine. It offers a range of products with unique e-liquid flavors that is unmatched in our industry. Its products are marketed under the Vapor Group, Total Vapor, Vapor 123, and Vapor Products brands. It sells nationwide through distributors, wholesalers and directly to consumers through its own websites and direct response advertising.
All of its E-cigarettes consist of a long-life battery, a heating element, a cartridge filled with an “e-liquid” and an atomizer which when heated vaporizes the e-liquid. Because E-cigarettes are not “lit” like regular cigarettes, they don’t create flame, smoke from burning, ash, tar, noxious fumes or leftover “cigarette butts”. As a result, they may be used virtually anywhere.
Vapor Group is committed to providing E-cigarettes that are convenient and economical to use, safer and healthier than traditional smoking, and which provide a flavorful, enjoyable smoking experience.
Vapor Group, Inc. is managed by a highly experienced team of executives committed to responsible business policies and practices, including the marketing of our products only to those eighteen years of age or older, not making or avoiding claims about our product health benefits, and fulfilling the requirements of all applicable laws and regulations.
Safe Harbor Statement:
This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Certain statements set forth in this press release constitute “forward-looking statements.” Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and may contain the words “estimate”, “project”, “intend”, “forecast”, “anticipate”, “plan”, “planning”, “expect”, “believe”, “will likely”, “should”, “could”, “would”, “may” or words or expressions of similar meaning. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause the company’s actual results and financial position to differ materially from those included within the forward-looking statements. Forward-looking statements involve risks and uncertainties, including those relating to the Company’s ability to grow its business. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the Company’s limited operating history, the limited financial resources, domestic or global economic conditions — activities of competitors and the presence of new or additional competition and conditions of equity markets.
Vapor Group, Inc. 954-792-8450