UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 15, 2015

 

VAPE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   333-163290   90-0436540
(State of other jurisdiction   (Commission   (IRS Employer
of incorporation)   File Number)   Identification No.)

 

21822 Lassen St., Suite A

Chatsworth, CA 91311

(Address of principal executive office)

 

1-877-827-3959

(Registrant's telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

  

 

 

   
 

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The Company has issued the following shares of its common stock pursuant to conversions of convertible notes since the filing of a Current Report on Form 8-K filed on October 14, 2015:

 

On October 15, 2015, the Company issued 1,271,000 shares of its common stock pursuant to a conversion notice from a noteholder in the amount of $14,680.

 

On October 16, 2015, the Company issued 1,636,364 shares of its common stock pursuant to a conversion notice from a noteholder in the amount of $18,900.

 

On October 19, 2015, the Company issued 1,298,701 shares of its common stock pursuant to a conversion notice from a noteholder in the amount of $15,000.

 

On October 19, 2015, the Company issued 1,500,000 shares of its common stock pursuant to a conversion notice from a noteholder in the amount of $17,400.

 

On October 21, 2015, the Company issued 1,515,152 shares of its common stock pursuant to a conversion notice from a noteholder in the amount of $17,500.

 

On October 21, 2015, the Company issued 1,500,000 shares of its common stock pursuant to a conversion notice from a noteholder in the amount of $16,650.

 

The original issuance of the above convertible notes, and their subsequent amendment, were previously disclosed on our Current Report on Form 8-K dated December 8, 2014 and in our Quarterly Reports on Form 10-Q dated February 17, 2015 and August 14, 2015, respectively, which disclosures are incorporated by reference herein.

 

In addition, on October 22, 2015, the Company issued the following shares to certain management, employees and consultants as payment for accrued but unpaid compensation and/or fiscal year-end bonuses:

 

CEO and Chairman Kyle Tracey converted $50,000 in accrued but unpaid salary into 2,083,333 shares of restricted common stock. President and Director Joe Andreae converted $13,333.33 in accrued but unpaid salary into 555,555 shares of restricted common stock. CFO and Director Allan Viernes and COO and Director Benjamin Beaulieu each received a bonus issuance of 600,000 shares of common stock.

 

An employee converted $30,000 in accrued but unpaid salary into 1,250,000 shares of restricted common stock. A consultant also converted $30,000 in bonus compensation into 1,250,000 shares of restricted common stock. Additional employees received an aggregate of 300,000 shares of restricted common stock as year-end bonus compensation. All of the above issuances approved by the Company on October 22, 2015 were issued at $0.024 per share which is the fair market value of the Company’s common stock on October 22.

 

In making the above sales without registration, we relied upon the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. 

 

As of October 22, 2015, the total number of shares of shares outstanding of the Company’s common stock was 43,666,686. 

 

Item 8.01 Other Events

 

Cancellation of Option Plan and Surrender of Options

 

On September 18, 2015, officers, employees, and consultants of the Company decided to surrender 995,000 options to purchase the Company’s common stock granted from the 2014 Incentive and Nonstatutory Option Plan (“2014 Option Plan”) due to the fact that the options have an exercise price substantially greater than the current trading price of the Company’s common stock.

 

The Chief Executive Officer, Chief Financial Officer, President, and Chief Operating Officer decided to forfeit 175,000 incentive statutory options each with an exercise price of $0.70. All other optionholders forfeited an aggregate amount of 295,000 options at exercise prices of $0.70 and $0.83, respectively. The options were formally accepted and canceled by the Company on October 22, 2015.

 

Following the surrender and cancellation of the above options, the Company elected to withdraw and terminate the 2014 Option Plan, and will re-evaluate the implementation of an option plan in the future once it has determined that the market for the Company’s stock has stabilized to the point where the issuance of options to employees, officers and directors will have the value necessary to compensate its employees, management and consultants.

 

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A copy of the Form Option Surrender Agreement is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.

 

Stock Surrender

 

On October 22, 2015, Kyle Tracey and Joe Andreae surrendered 130,000 shares of common stock previously issued to them on March 12, 2015 back to the Company pursuant to Stock Surrender Agreements. An additional employee also surrendered 15,000 shares of common stock back to the Company on the same date pursuant to Stock Surrender Agreements.

 

A copy of the Form Stock Surrender Agreement is attached as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated by reference herein.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.   Description
     
10.1   Form of Option Surrender Agreement.
     
10.2   Form of Stock Surrender Agreement.

  

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  VAPE HOLDINGS, INC.  
     
Dated: October 22, 2015 By: /s/  Kyle Tracey
    Kyle Tracey
    Duly Authorized Officer, Chief Executive Officer

  

 

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Exhibit 10.1

 

OPTION SURRENDER AGREEMENT

 

TO: VAPE HOLDINGS, INC. (THE “COMPANY”)

 

RE: SURRENDER OF OPTIONS

 

The undersigned holder of non-statutory stock options (the “ Company Options ”) to acquire shares of common stock of the Company, par value $0.00001, granted pursuant to the 2014 Incentive and Nonstatutory Stock Option Plan (the “ Plan ”), agrees to surrender each Company Option set forth on  Exhibit A  hereto (the “ Surrendered Options ”).   The undersigned is permitted to surrender, for no consideration, Company Options pursuant to Section 10 of their Nonstatutory Stock Option Agreement (the “ Option Agreement ”)

 

The undersigned has determined to surrender the Surrendered Options, each of which has an exercise price substantially greater than the current trading price of the Company’s common stock, in order to assist the Company in attracting and retaining talented executive and employees in the future.

 

Therefore, without requiring any further action on the part of the undersigned, and notwithstanding any terms of the Option Agreement to the contrary, the undersigned hereby irrevocably elects to surrender the Surrendered Options immediately upon the execution of this agreement by the undersigned.

 

In connection with the surrender of the Surrendered Options, the undersigned represents and warrants to the Company that (a) he or she is the beneficial and registered owner of the Surrendered Options, which are free and clear of all liens, charges, encumbrances and any other rights of others; (b) he or she has good and sufficient power, authority and right to enter into and deliver this agreement and to transfer the legal and beneficial title and ownership of the Surrendered Options to the Company, free and clear of all liens, charges and encumbrances; (c) he or she has duly executed and delivered this agreement and it constitutes a valid and legally binding obligation on him or her, enforceable against him or her in accordance with its terms; (d) there is no contract, option or any other right of another binding upon or which at any time in the future may become binding upon him or her to sell, transfer, assign, pledge, charge, mortgage or in any other way dispose of or encumber any of the Surrendered Options other than pursuant to the terms of this agreement; and (e) the undersigned has not been promised, nor has he or she received nor will he or she receive, any cash or any grants of equity awards relating to shares of Company common stock in exchange or consideration for the surrender of the Surrendered Options.

 

In the event of a conflict between the terms of this agreement and the Plan or the applicable Option Agreement, the provisions of this agreement shall control.

 

The undersigned acknowledges that he or she has read this agreement, understands it and voluntarily accepts its terms. The undersigned further acknowledges that this agreement is executed voluntarily and without any duress or undue influence on the part of or on behalf of the Company.

 

This agreement shall be governed and construed in accordance with the laws of the State of California, without regard to conflicts of laws thereof. This agreement may be executed in counterparts, each of which shall be an original, with the same effect as if the signatures affixed thereto were upon the same instrument.

 

This agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representatives.

 

[Signatures on following page]

 

 

 

DATED  as of the ___ day of September, 2015.

 

 
     

 

Accepted by the Company on this ___ day of September, 2015.

 

  VAPE HOLDINGS, INC.
     
  By: /s/ Kyle Tracey
   

Kyle Tracey,

Chief Executive Officer

 

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EXHIBIT A

 

SURRENDERED OPTIONS

 

 

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Exhibit 10.2

 

STOCK SURRENDER AGREEMENT

 

This STOCK SURRENDER AGREEMENT (the “Agreement”) dated as of October 20, 2015, by and between VAPE Holdings, Inc. (the “Company”) and the undersigned shareholder (the “Shareholder”) of Company common stock.

 

W I T N E S S E T H:

 

WHEREAS , on or about March 12, 2015, as applicable, the Shareholder was issued the number of shares of common stock set forth opposite the Shareholder’s name on Schedule A hereto, par value of $0.00001 per share (the “Common Stock”) pursuant to a bonus stock grant by the Company;

 

WHEREAS , the Shareholder desires to surrender his legal right, title and interest in the Common Stock to the Company which will be held by the Company as treasury stock;

          

NOW, THEREFORE , in consideration of the promises and mutual covenants, agreements, representations and warranties herein contained, the parties hereto agree as follows:

 

1.  Surrender of Shares . Subject to the terms and conditions of this Agreement, as of the date first above written, the Shareholder hereby surrender all legal right, title and interest in the Shares to the Company to be held by the Company as treasury stock. The Shareholder shall receive no consideration for the surrendered Shares.

 

2.  Further Assurances . The Shareholder represents and warrants to the Company that (a) he is the beneficial and registered owner of the Shares, which are free and clear of all liens, charges, encumbrances and any other rights of others; (b) he has good and sufficient power, authority and right to enter into and deliver this agreement and to transfer the legal and beneficial title and ownership of the Shares to the Company, free and clear of all liens, charges and encumbrances; (c) he has duly executed and delivered this agreement and it constitutes a valid and legally binding obligation on him, enforceable against him in accordance with its terms; (d) there is no contract, option or any other right of another binding upon or which at any time in the future may become binding upon him to sell, transfer, assign, pledge, charge, mortgage or in any other way dispose of or encumber any of the Shares other than pursuant to the terms of this agreement; and (e) after the date hereof, the Shareholder agrees to take any and all actions necessary to surrender the Shares to the Company.

 

3.  Acknowledgements . The parties hereto acknowledge and agree that the intent and purpose of the transaction contemplated by this Agreement is not to hinder or defraud any creditor of Shareholder. The Shareholder acknowledges that he has read this agreement, understands it and voluntarily accepts its terms. The Shareholder further acknowledges that this agreement is executed voluntarily and without any duress or undue influence on the part of or on behalf of the Company.

 

4.  Entire Agreement: Amendments . This Agreement contains, and is intended as, a complete statement of all the terms of the arrangements between the parties with respect to the matters provided for and supersedes any and all prior agreements, arrangements and understandings between the parties with respect to the matters provided for herein. No alteration, waiver, amendment, change or supplement hereto shall be binding or effective unless the same is set forth in writing, signed by the parties hereto or a duly authorized representative thereof.

 

5.  Notices . Any notices required or permitted to be given under this Agreement shall be in writing, signed by the party giving such notice and shall be deemed duly given when sent by registered or certified mail return receipt requested, to the other parties hereto at such parties address set forth on the signature page hereto or at such other address as such parties shall designate by similar notice to the other parties.  

 

6.  Governing Law . This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, without giving effect to principles of conflicts of law or choice of law. Each Shareholders and the Company hereby agree that the state and federal courts located in Los Angeles, California, shall have exclusive jurisdiction and venue over all actions relating to this Agreement.

 

 

 

IN WITNESS WHEREOF , the parties have hereunto executed this Agreement on the day and year first above written.

 

 

VAPE HOLDINGS, INC. 

     
  By: /s/ Kyle Tracey
  Name: Kyle Tracey
  Title: CEO
     
  SHAREHOLDER
     
   

 

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Schedule A

 

Shareholder   Number of Shares to be Transferred to the Company
         

 

 

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