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You nailed the reason squarely on the head as to why companies choose to do a spin-off.
If one of the subsidiaries is heading in a completely different direction with widely different product lines and different strategic priorities, then allowing this portion to operate independently can unlock value... Each segment can now operate independently to allow executives of each to focus on their core business instead of a broad spectrum.
It also allows investors like yourself that are more interested in one segment over the others to buy shares in a more specific type of business that fits their investment objectives.
Market consensus points to value with spin-offs, and are widely viewed as a positive attribute.
Thanks for the last piece of the puzzle I was missing. If this speculation comes true and the spin off does happen, I will be loading up big on Simple Cork. Its the best of both worlds to me, I still highly value VPOR and I still get to chase the product I initially came to VPOR to invest in.
Not exactly. For your specific example...
Quote: Cash, if I have this correctly in my head now. If a share holder has 3,000,000 shares of VPOR and the spin off goes 3/1. For every 3 shares of VPOR I have I will get 1 of Simple cork.
A) correct
Quote: Translation after spin off? My 3,000,000 shares would look like this:
VPOR 2,000,000 shares
(Simple Corks ticker) 1,000,000 shares.
A) VPOR 3M shares, Simple Cork 1M shares
The value of your shares in VPOR will adjust to represent the additional value of the spin-off, so initially the total value of your positions combined will equate to the same value immediately prior to the spin-off once both pps are calculated.
Cash, if I have this correctly in my head now. If a share holder has 3,000,000 shares of VPOR and the spin off goes 3/1. For every 3 shares of VPOR they have they will get 1 of Simple cork.
Translation after spin off? That investors 3,000,000 shares would look like this:
VPOR 2,000,000 shares
(Simple Corks ticker) 1,000,000 shares.
Would this be correct?
Subsidiary splits from the parent into a new ticker, so there's no share split.
My only questions are....
When they split the shares....are the new shares at par or the same price as the PPS is now? And where does the money come from to double everyone's shares?
And since they dont have a new company name anymore are we sure they still plan on splitting?
Thanks Cash, I went to the IRS website and learned the rest the spin off legal stuff. Here is a direct link to section 355 for the rest of you to look at for your on research.
section 1- (D):
(i) and (ii)
Section (2)- (A-C)
https://www.law.cornell.edu/uscode/text/26/355
Even though a spin-off is referred to as a dividend, there's no dividend payment.
A spin-off is the pro rata distribution of the stock of a corporation that is controlled by the distributing parent. In a spin-off, the distributing parent distributes the stock of the controlled company to the parent’s shareholders, and the shareholders do not surrender any stock. Thus, after a spin-off, all of the prior shareholders of the distributing parent now own stock of both the distributing company and the controlled company. And, because the distribution is pro rata, they own the two corporations in same proportions as before.
The manner in which a parent company generally structures the spinoff and divests itself of a subsidiary is done so the taxable status of a spinoff is governed by IRS code Section 355.
The majority of spin-offs are tax-free when they meet Section 355 requirements for tax exemption which allows the players to get an extraordinary package of benefits... i.e...
No Shareholder-Level Gain
A distribution that qualifies under Code Sec.355 means no tax at the shareholder level. Even if you get handed a share of stock in a new separate company, it is not taxable.
No Corporate-Level Gain
A distribution that qualifies under Code Sec.355 will also not trigger any corporate-level tax.
That would be convenient having it done automatically. On the spin off you were apart of was it a 1:1, 3-1, or 5-1 share distribution? Was your spin off tax free?
so you would not get a check, you would get the appropriate amount of shares deposited directly into your account.this has been my experience
further research into the speculation of a spin off of Simple cork (once again speculation as we don't know yet)
The spin off stuff- I know bits and pieces of it, but not the whole picture. If anything I typed up here is incorrect please correct me to educate myself and the other members on the board =D
I will not care about a spin off if it is tax free. If it is not tax free... that dividend check (the shares you would be getting for the spin off company Simple Cork) your getting will get taxed as if it is income in your tax bracket you fall into. That can be at the max 35% tax!!! Or if your a long it will be taxed at 15%.
We lose your butt, and everyone flips out angry. That would be catastrophic to those investors that invested long and did help the company grow. Just making an example, a long share holder has 30,000,000 shares. (throwing a number) lets say his dividend check is for $45,000 and it is not tax free
$45,000 X (tax 15%) = $6,750 loss because of the spin off not being tax free. This investor will only have $38,250 left to invest in the spin off company.
Even worse a non long investor is at 28% tax in his bracket.
$45,000 X (tax 28%) = $12,600 loss because of the spin off not being tax free. This investor will only have $32,400 left to invest in the spin off company.
It is good news that even people on the in with Jeff Sessions don't want to go the route he wants. Although Sessions can ignore them all and go lone wolf.
If sessions goes lone wolf and ignores his advisers, he needs to see the bigger picture. When a lot of people have dollar signs in their eyes and your the one person that is preventing the cash flow... Your own personal safety becomes a concern. The guy is just doing his job and he is willing to stand his ground. It is noble, and I respect him for defending his stance and views.
Also, by changing the shares structure down to 2 billion each would it be possible to rocket the PPS up to 10 cents and beyond ?
Gotcha I appreciate that explanation !! So if and when they do a spin off could the split the shares do their would be roughly now 2 billion to each ? Also, that doesn't change the amount of shares we have to adjust to the vale of the stock does it ?
Hahah!!
Now you know why they had so much trouble with the Hubble telescope back in the day. 6 Pack Larry was lead mechanic on that tin can.
Anyways, I think VPOR rocket is fixed and ready for blast off. Count down starts Monday morning.
VPOR!!!
With a spin-off you receive the stock of another company as a dividend. That gives you position in two companies. A lot of time both the parent and the spin-off can see benefit. By separating them the two companies, they become pure plays that people can jump into. Typically they buy quick and in boat loads. Early on relax, some investors may want nothing to do with the spin off company or the parent company after the news is released. Their will be a lot of selling and buying going on as investors scramble to take the positions they want.
Generally, the spin-off does better, because it is the new to the market and was formerly overshadowed by the older larger business. By the time spin-offs are announced it might be too late to really get good value like we are in the mid 2's. In this case Simple Cork will be a new product on the market and it might get a little crazy when its ticker finally goes up.
(Negative side of spin off news)
A typical trader that has no interest in the company other than trying to flip a quick profit will jump at possible spin off news... These traders want to get in now. Than they will wait for the news to hit and then sell to the people piling in, and not wait until the spin-off is completed.
So when they split the company simple cork and easy grinder. will change the share structure to cause the PPS to go up ?
(running joke, share a laugh ) Wallnut, I heard Major Tom got a call from mission control and the VPOR rocket is back on the schedule for this coming week. They really, REALLY, think Larry fixed it this time...
Larry said it was a bad coil pack. What we really found out was the coil was from the plastic the held his 6 pack of beer together and Larry was drinking when he was wiring the main thrusters.... (well at least he did lie it was a coil and a pack)
(facepalm) why we would let cross eyed Larry do this important wiring is beyond me! Maybe when he is drinking the images line up in the middle and he can see clearly (shrugs shoulders) COME ON LARRY!!! we are trying to get off the ground not pass out on it!
VPOR! The rocket is staged once again, and the PPS should be moving soon. Know what you own as next week may be the last time we can buy in the 2's and 3's
with DROR out and financials looming around the corner, we are on the board once again, we had a pull back and staying @0.0025-0.0027. lets see what VPOR has to offer, i think a lot.
VPOR all the way up.
P.S picking up more shares on monday.
I have 8/9/17 highlighted on my calendar. It is the last day for on time Q2 reports to the SEC. I am optimistic VPOR had enough sales from the easy grinder alone, that the company will be in the positive amounts on the sheet for Q2 2017.
On the balance sheet from Q1 2017:
The Net Tangible Assets were -$2,933,000 (yes about 3,000,000 in the negative)
On the easy grinder website there has been over 55,000+ orders confirmed. What we don't know is how many of these orders were placed and processed on the Q1 2017 report.
I strongly believe we are apart of something incredible, we might not see a major boom on the Q2 reports, but man oh man by Q3 and Q4 we should be sitting pretty.
(side note) The kiddies will be back in school soon, and the market is going to awake from its hibernation.
Tap your radar a few time.
I think its broken or stuck.
Try searching Ebay for a new one if the tapping don't work.
Your Welcome!!
Back to mid 30's next week.
The 6 months does not apply to this company
You misinterpreted the rules. I also have no clue where you got any of those percents you mentioned.
But yes, there was $3M in debt. But who's to say that has not been paid off? It seems to me they sold well over 60K units, especially if you include July and going forward.
Convertible debt is quite common with the penny stocks I've seen. But that is the absolute least of my concerns about this common (it's not even on my radar)
Sessions panel mostly advised to leave marijuana policy alone with the Justice Dept still opposed but not doing much. Sessions remains committed against legalization. Its a shame he didn't resign or wasn't fired
Interesting article lends credence to expanding markets: http://www.thecannifornian.com/cannabis-news/seniors-board-cannabus-trip-medical-marijuana-dispensary/ Broaden those markets, Yaniv!
Truth12 so good by to you
There's no industry norm. Discounts range from...
10% to 80%
and averages range anywhere from previous 5 - 20 days closing price.
You can't possibly apply a industry norm from one ticker to the next with that range. You're simply applying a subjective opinion...that's all.
No generalities are not facts. But, all the notes do have a convertible feature to them, as disclosed in VPOR filings. So my generalities are not going to be that far off based on the industry norm.
That's because VPOR is an alternative reporting company and is not subject to the reporting requirements of Section 13 or 15(d) of the exchange act.
Using generalities isn't really facts now, is it?
Again, DD is required.
You are 100% correct that Rule 144 is for affiliates and control persons. However, you do not have to be a control person or affiliate to sell under Rule 144. If you have unregistered shares from the issuer, which the shares are when a note holder converts, they are restricted. Restricted shares can be sold under Rule 144 by anyone that meets the requirements. The only other way that note holders can sell their shares is under Section 4(a)(1), and they have to hold the note for a year before they can sell the shares.
And I was using generalities because VPOR does not disclose the terms of the notes in their filings. If you look at some other issuer's that do disclose that information, it's pretty much the numbers that I was using.
OK, I assume you are speaking about the
merger with NewGen Concepts. $VPOR
You should read it more carefully. Rule 144 applies more so to insiders and affiliates of control securities.
You also have no idea what the terms of each of those notes entail, and are throwing out numbers without the first clue.
No one said they were paying with cash, that's why you should go read some filings and do some DD first.
Oh it definitely does. Go read the rule.
https://www.sec.gov/reportspubs/investor-publications/investorpubsrule144htm.html
Here's a snippet for you as well:
Restricted securities are securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer. Investors typically receive restricted securities through private placement offerings, Regulation D offerings, employee stock benefit plans, as compensation for professional services, or in exchange for providing "seed money" or start-up capital to the company. Rule 144(a)(3) identifies what sales produce restricted securities.
Shares from conversions are restricted shares. And you don't see conversions because the note holders don't have to file when they convert. You will never see it. Just go compare the amount of debt left on the notes compared to past filings.
Also, with what cash are they going to pay the debt back with?
I suggest you go read the rule. Here's a link for you: https://www.sec.gov/reportspubs/investor-publications/investorpubsrule144htm.html.
Here's a snippet for you as well: Restricted securities are securities acquired in unregistered, private sales from the issuing company or from an affiliate of the issuer. Investors typically receive restricted securities through private placement offerings, Regulation D offerings, employee stock benefit plans, as compensation for professional services, or in exchange for providing "seed money" or start-up capital to the company.
Note holders shares are unregistered shares, they have to have an exemption to sell the shares. They use Rule 144.
Lol Rule 144 doesn't apply to note holders and there has been no conversion in months. On the contrary, the AS was recently reduced by 40% and the CEO previously stated there are plans for debt payments without further conversion, which all has been confirmed by the TA. Do some DD ffs.
I understand my friend, I also understand the business plan:
"Under the terms of the Merger, Vapor Group will immediately explore the spin-off of each of Vapor Groups subsidiaries as an independent, publicly-traded company, wherein the first spin-off would occur in 2017 by a share dividend to existing shareholders of record on a given date of own-ership. The first such spin-off will be Total Vapor, Inc., which is currently expanding its product offering into vaporizers and related products suitable to the growing market for legal Cannabis products sold..."
This stock won't go anywhere. Has $3.4m in debt that's convertible to common stock. All the note holders have held the notes for over 6 months, making them eligible for Rule 144 exemption. Most probably have around a 50% discount conversion rate, convertible at 50% the low price for the previous 20 days on the day they convert. The note will have a conversion blocker at 4.99% of the outstanding shares, so the note holders don't have to report their sales. If volume picks up at all in this stock, there will be more conversions. Good luck.
Simple Cork
Shalom is removed, as I expected, but Dror is not listed here either...
http://search.sunbiz.org/Inquiry/CorporationSearch/GetDocument?aggregateId=domp-p16000089384-b653789e-c36f-43e5-846b-246fe8a0fac7&transactionId=p16000089384-2fd4e240-ba6f-4fed-9ef1-99a246f2dd63&formatType=PDF
Nice! 160 of EGs in stock.
Now on Etsy... ha
https://www.etsy.com/listing/532356060/easy-grinder-automatic-herbal-grinder?ga_order=most_relevant&ga_search_type=all&ga_view_type=gallery&ga_search_query=weed grinder&ref=sr_gallery_47
Ah ha! Thanks for your insight. Time to sit back and hope Yaniv and Dror make the right moves.
Yes, it would be advantageous for company to buy low, but often when companies announce a buy back it skyrockets price, and defeats the purpose and end up not so advantageous for company to dish out cash that could be utilized elsewhere, but shareholders love it. So, if they do announce one, then the anticipation alone may do the trick with a decent bounce
On the other hand, there's other ways of reducing OS, and that's by cancelling preferred shares and moving them into treasury.
The recent shake-up with executives could entail something along those lines as well.
Think about it...if Dror has stepped down, and the Cork execs are no longer in the picture, then for one, he should be willing to give up a portion of his preferred shares for the good of the company, and second, those shares that were previously held by cork execs that were issued should be returned to treasury...
Also, the float is much smaller than the 4.2b currently held at DTC when you consider the preferred shares.
Another consideration is if they do an S-1 registration for the new divy ticker, it will likely have whatever preferred shares they issue for those execs, plus the number of shareholders here at the time of the ex-date prior to divy -- so, taking that number into account then the OS will probably show considerably less shares than what we currently have here.
You do understand that Easy Grinder is
owned by EZ Grinder INC. and that Total Vapor has the exclusive distribution rights only. In the past, Vapor Group has purchased the companies such as Total Vapor, VGR Media Inc and Smart Wheels. So Far, I haven't seen any indication that VPOR has purchased EZ Grinder Inc. I hope this happens soon, otherwise Easy Grinder will remain with Dror Svorai.
It's a balance. If they're in a position to spend excess capitol the shares will never been cheaper than they are now...however...if they need the capitol to grow without burning even more shares...which would you prefer?
PPS issue addressed by spinoff of E.G. with low float and PPS will soar to muti dollar land. High revenue low float. Each spinoff gains new share structure. VPOR shareholders benefit from each spinoff that they gain shares in. This was the business model that attracted me to this play in the first place. I'm waiting for what's next beyond simple cork.
Right.
I feel like it would be easier to fix now rather than later. But I'm not an expert so I wanted to hear other opinions.
They're going to have to do something about the outstanding shares eventually. Revenue alone won't help any time in the forseable future
They have to sell 250,000,000 in revenue to justify that on any level
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Easy Grinder™ Video Link here
On July 20, 2017, Yaniv Nahon, VP, COO and Secretary of the Company was appointed the new President & CEO and Treasurer of the Company, and Dror Svorai, former President & CEO of the Company resigned as an officer and director of the Company and each of its subsidiaries in order to pursue other interests. Simultaneously, Jorge Schcolnik, Chief Financial Officer of the Company was named a member of the Board of Directors of the Company and corporate Secretary.
Concomitantly on July 20, 2017, Dror Svorai entered into a stock purchase agreement with SF Holdings LLC, a privately-held investment company with which he is not affiliated, wherein he sold 100% of his Series A Preferred Stock to SF Holdings LLC and transferred voting control of the Company to SF Holdings LLC. Terms of the stock purchase agreement were not disclosed. Mr. Svorai agreed for an indeterminate amount of time to act as a consultant to the Company's management to smooth the transition.
On August 14, 2017, the Company posted on OTC Markets.com, its second quarter 2017 disclosure statement citing the above changes. The Company also posted its second quarter 2017 financial statements. Yaniv Nahon, current President & CEO of the Company, stated, "The financial statements as of June 30th don't reflect the huge sales gains of Easy Grinder™ to date that we have made since shipping and invoicing only began in early June, with product inventory arriving in multiple shipments throughout the month. So, the financial statements show only a few weeks of Easy Grinder™ sales results." He added, "You'll see a huge gain in our revenues in the third quarter report as Easy Grinder™ sales climbed upward. Also, we made significant sales gains from our attendance at the BIG Industry Show in New York City in August, and ASD Market Week and the CHAMPS Trade Show in Las Vegas in July. This is going to be a very good year."
Link to Press Release here
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