Small Business Development Group Inc (SBDG)

[MoneyWorksForMe]

SMALL PUBLIC COMPANY ANALYSIS GROUP - Roy Y Salisbury

dear SMALL PUBLIC COMPANY ANALYSIS GROUP / www.rysalisbury.com

..if i could have only read an analysis from you for POS VRNI Before i bought in...

here's hoping against all hope and odds that you all can practice what you preach and turn SBDG into a real / profitable company...after all as you have proclaimed, it is your 'Prototype Model'.

..to me sounds like your debut and in my opinion signature company by which your precious investors will use to gauge, quantify and calculate their decisions to (as well as if and how much) participate (invest, recommend your services), ultimately determining any if not all future success but hey, No Pressure! Lol :D

http://www.rysalisbury.com/pdf/Vapor-Corp-Business-Review.pdf

Summary
Like many companies past, present and future VPCO was poorly equipped to become a public company and once
public has been unable to benefit from the company’s public status. For the most part managers and owners who
go public thru Reverse Mergers or Takeovers are not fully prepared for the cost in capital and time it takes to stay
public and it is not a the solution as advertise for accessing public markets (CASH).
On its current course VPCO cannot justify being a fully reporting public company with its related cost. The present
course of the company does not build confidence that share price will increase in value based on current trends.
For a company such as VPCO it needs to access fresh capital to grow and build on fundamentals. On the present
course VPCO has few opportunities mostly all bad (toxic) to access capital due to its share price, liquidity and
overall profitability.
A number of key observations;
The long term debt on the company’s books is held by insiders and affiliates of the company with high
interest rates. Some or all of the debt is convertible and in a case of default will most likely have a
negative impact on share price and dilution of current shareholders.
VPCO and its product line is in a growth market that seems to be continuing to grow at double digit rates
and will continue to do so barring any unforeseen upheavals in the market place.
VPCO management feels their strength is in the development of multiple brands of product. This may in
fact be a flaw in their marketing strategy. Too many brands would seem to project the lack of a leading
brand to take on the fledgling industry’s leadership role which should be VPCO’s goal one would think.
Federal and State regulation will continue to be a factor for companies such as VPCO and the industry as a
whole.
Lack of any independence on the company’s Board of Directors limiting fresh thinking.
Unknown product liability risk
The current capital structure (stock) is not sustainable simply based on the company’s inability to show
improving fundamentals the movement toward stability and profitability.
Recommendations to VPCO;
Management needs to develop an executable plan to vitalize the company building on its current
strengths and sheltering its present weaknesses.
The restructuring of the capital structure should be considered, realignment of SG&A and COGs to fit into
a workable financial model, and restructure the Balance Sheet to improve net value.
In today’s economic climate management of companies such as VPCO are going to need to go above and beyond
from a planning standpoint and articulate to its clients, employees and stakeholders why the company will succeed
in an economy in which many are failing.
Based on a good plan the Company can pursue recapitalization to fund growth. The company needs capital to
achieve economies of scale that create the needed fundamentals to achieve financial stability and profit. VPCO
does have a number of things going for it that if management can leverage (develop a plan) the public status, sales
growth and fledgling industry the company can prosper
Management will need to make some tough decisions to survive and prosper in the current financial markets.
Holding ones ground will not be enough to succeed.

Sources;
Company website
Public filings 10-K, 10-Q & 8-K’s
Yahoo Finance
Internet

www.rysalisbury.com

http://www.rysalisbury.com/pdf/Vapor-Corp-Business-Review.pdf