Vape Holdings, Inc. (Form: 8-K, Received: 12/11/2015 16:25:33)

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): December 8, 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 1.01

Entry Into a Material Definitive Agreement.

On December 10, 2015, Vape Holdings, Inc., a Delaware corporation (the “Company”), the Company entered into two Secured Series B Preferred Stock Convertible Notes (the “Series B Notes”) for an aggregate principal of $300,000 including 1) $50,000 from Hive Ceramics, LLC in new capital to the Company and 2) an amended and restated note for Hive Ceramics LLC in the amount of $250,000 for capital previously contributed which is soon to be due and payable.

The Series B Notes accrue interest at eight percent (8%) per annum, mature one (1) year from issuance and are secured by all of the assets and property of the Company. Upon the election of the noteholder, the Series B Notes are convertible into newly created Series B Preferred Stock on a one-for-one (1:1) basis into shares of common stock of the Company at a fixed price per share of $0.01.

Concurrently, the Company filed a Certificate of Designation with the Delaware Secretary of State on the Series B Preferred Stock which provides, in pertinent part, for the following rights and privileges:

Authorized Amount of Series B Preferred Stock : There are authorized 30,000,000 shares of Series B Preferred Stock, subject to the Certificate of Designation. There shall be no additional Series B Shares authorized or issued.

Voting Rights : Each share of Series B shall be entitled to five (5) votes for every one (1) vote entitled to each share of Common Stock.

Rank : All shares of Series B shall rank (i) senior to the Company’s Common Stock, (ii) pari passu with all other series of preferred stock whether currently outstanding or hereafter created, including the Series A Preferred Stock, and specifically ranking, by its terms, on par with Series B, and (iii) junior to any class or series of capital stock of the Company hereafter created specifically ranking, by its terms, senior to the Series B, in each case as to the distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary.

The Board of Directors of the Company (the “Board”) authorized the designation of the Series B Preferred Stock pursuant to the authority of the Certificate of Incorporation, which confers said authority on the Board, and the issuance of the Series B Notes pursuant to a unanimous written consent of the Board dated December 10, 2015.

Copies of the Certificate of Designation, Secured Series B Convertible Promissory Note, and Amended and Restated Secured Series B Convertible Promissory Note are attached as Exhibits 3.1, 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant.

The information set forth in item 1.01 with respect to the Series B Notes is incorporated by reference herein.

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 December 4, 2015:

On December 8, 2015, the Company issued 5,000,000 shares of its common stock pursuant to a conversion notice from a noteholder in the amount of $18,000.

On December 11, 2015, the Company issued 5,570,000 shares of its common stock pursuant to a conversion notice from a noteholder in the amount of $13,368.

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 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 December 11, 2015, the total number of shares outstanding of the Company’s common stock was 112,062,635 .

In addition, the information set forth in item 1.01 with respect to the Series B Notes is incorporated by reference herein.

Item 5.02.

Departure of Directors or Certain Officers; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On December 10, 2015, the Board appointed Justin Braune to serve as the Company’s Chief Executive Officer and as a director, effective immediately.

Prior to joining the Company, Mr. Braune, 33, served as the chief operating officer of Voodoo Science, LLC and Vapor Wild from 2014 to 2015. From 2013 to 2014, Mr. Braune served as the Chief of Operations for Veracity Security, a technology company located in San Diego. From 2013-2014 Mr. Braune was the Director of Sales at Lear Capital. Since 2010 he owned and operated Braune Enterprises a real estate and investment brokerage firm. Mr. Braune graduated from the United States Naval Academy with a B.S. degree in electrical engineering in and was commissioned as an officer in the U.S. Navy. After earning his master’s degree in nuclear engineering, Mr. Braune operated the nuclear reactors onboard the USS RONALD REAGAN aircraft carrier. He served in the U.S. Navy until 2009 and subsequently earned his MBA at the University of Southern California, Marshall School of Business. Our Board believes that Mr. Braune’s extensive relationships and experience in the industry of vaporization products and e-cigarettes will bring added value to the Company’s management team.

In connection with his appointment as Chief Executive Officer and a member of our Board, Mr. Braune entered into an employment agreement dated as of December 10, 2015 (the “Employment Agreement”) with the Company pursuant to which he will receive an annual salary of $150,000, subject to adjustment, and bi-monthly sales-based compensation of $1.00 USD per unit of wholesale sales of Mr. Braune’s new vaporizer pen product line and $3.00 USD per unit on retail sales. The sales-based compensation and salary is payable in cash or stock as further described in the Employment Agreement.

In addition, the Company will issue to Mr. Braune 20,000,000 shares of the Company’s common stock, to be held in escrow and released by the Company to Mr. Braune in accordance with the following vesting schedule: (i) 5,000,000 shares shall vest on June 10, 2015, (ii) 5,000,000 shares shall vest on December 10, 2016, (iii) 5,000,000 shares shall vest on June 10, 2016, and (iv) 5,000,000 shares shall vest on December 10, 2016. Mr. Braune also is eligible to participate in any stock option plan maintained by the Company and available to other employees and standard benefit programs for similarly situated employees. The Employment Agreement continues until terminated by either party upon 30 days’ prior written notice.

On December 10, 2015, the Board accepted the resignation of Kyle Tracey as Chief Executive Officer, Chairman of the Board and all other officer positions held by him with the Company. Mr. Tracey will remain in a consultant role with the Company focusing on sales and business development of HIVE Ceramics for a period of two (2) years. Mr. Tracey also retains a large block of voting control of the Company due to the above issuance of the Series B Notes issued to HIVE Ceramics, LLC an entity he co-owns. The Board also accepted the resignation of Joe Andreae as President and a director as of December 10, 2015. The President seat will remain vacant until a qualified candidate is located.

Benjamin Beaulieu was elevated from his position as a member of the Board to Chairman of the Board on December 10, 2015 to replace Mr. Tracey. Mr. Beaulieu also currently serves as the Company’s COO and will remain in that role.

Mr. Braune does not have a material interest in any transaction that is required to be disclosed under Item 404(a) of Regulation S-K. There is no arrangement or understanding between Mr. Braune and any other person pursuant to which he was appointed as the Chief Executive Officer.

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

The information set forth in Item 1.01 with respect to the Series B Preferred Stock is incorporated by reference herein.

Item 8.01

Other Items.

On December 11, 2015, the Company issued a press release announcing the above corporate actions. The press release is attached as Exhibit 99.3 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description

3.1		Certificate of Designation for Series B Preferred Stock

10.1		Secured Series B Preferred Stock Convertible Promissory Note by and between the Company and Hive Ceramics LLC, dated December 10, 2015

10.2		Amended and Restated Secured Series B Preferred Stock Convertible Promissory Note by and between the Company and Hive Ceramics LLC, dated December 10, 2015

99.1		Executive Employment Agreement, dated December 10, 2015, by and between the Company and Justin Braune

99.2		Consulting Agreement, dated December 10, 2015, by and between the Company and Kyle Tracey

99.3		Press Release dated December 11, 2015

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: December 11, 2015	By:	/s/ Allan Viernes
		Allan Viernes
		Duly Authorized Officer, Chief Financial Officer

Exhibit 3.1

CERTIFICATE OF DESIGNATION

SERIES B CONVERTIBLE PREFERRED STOCK

VAPE HOLDINGS, INC.

Pursuant to Section 151(g) of the

General Corporation Law of the State of Delaware

The undersigned DOES HEREBY CERTIFY that the following resolution was duly adopted by the Board of Directors (the “Board”) of Vape Holdings, Inc., a Delaware corporation (the “Company”), by unanimous written consent of all Directors of the Company pursuant to § 141 of the General Corporation Law of the State of Delaware:

RESOLVED , that pursuant to the authority conferred on the Board by the Company’s Certificate of Incorporation, the issuance of a series of preferred stock, par value $0.00001 per share, of the Company which shall consist of 30,000,000 shares of convertible preferred stock be, and the same hereby is, authorized; and the Chairman and Chief Executive Officer of the Company be, and he hereby is, authorized and directed to execute and file with the Secretary of State of the State of Delaware a Certificate of Designation of Preferred Stock of the Company fixing the designations, powers, preferences and rights of the shares of such series, and the qualifications, limitations or restrictions thereof (in addition to the designations, powers, preferences and rights, and the qualifications, limitations or restrictions thereof, set forth in the Certificate of Incorporation which may be applicable to the Company’s preferred stock), as follows:

Authorized Amount of Preferred Stock

There are 100,000,000 shares of Preferred Stock authorized for the Company by the Articles of Incorporation, with par value of $0.00001 per share.

Authorized Amount of Series B Preferred Stock

There is hereby authorized 30,000,000 shares of Series B Preferred Stock (“Series B”), subject to this Certificate of Designation (“Certificate”). There shall be no additional Series B Shares authorized or issued.

Dividend Rights

The Series B shares shall be entitled to receive a dividend equal to any and all dividends authorized by the Company to holders of the Company’s common shares on a pro rata basis. Company currently has no plans to declare or pay a dividend of any kind.

Liquidation Preference

(a) In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holder of Series B shall be preferred in order of payment to the holders of the Company’s common stock at a rate par value per Series B share.

(b) A consolidation or merger of the Company with or into any other company or companies, or a sale, conveyance or disposition of all or substantially all of the assets of the Company or the effectuation by the Company of a transaction (including a merger or other reorganization) or series of related transactions in which more than fifty percent of the voting power of the Company is disposed of, shall be considered to be a liquidation, dissolution or winding up within the meaning of this section 4.

Rank

All shares of Series B shall rank (i) senior to the Company’s Common Stock, (ii) pari passu with all other series of preferred stock whether currently outstanding or hereafter created, including the Series A Preferred Stock, and specifically ranking, by its terms, on par with Series B, and (iii) junior to any class or series of capital stock of the Company hereafter created specifically ranking, by its terms, senior to the Series B, in each case as to the distribution of assets upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary.

Conversion

The 30,000,000 Shares of Series B shall be convertible into shares of Common Stock of the Company at the option of the holder on a one-for-one (1 for 1) basis (the “Conversion Shares”).

The term "Common Stock" as used in this Section shall mean the shares of the Common Stock of the Company, authorized at the date of the initial issuance of the Series B or, in case of a reclassification or exchange of such Common Stock, shares of the stock into or for which such Common Stock shall be reclassified or exchanged and all provisions of this section 6 shall be applied appropriately thereto and to any stock resulting from any subsequent reclassification or exchange thereof.

Voting Rights

Each share of Series B shall be entitled to five (5) votes for every one (1) vote entitled to each share of Common Stock. With respect to all matters upon which shareholders are entitled to vote or to which shareholders are entitled to give consent, the holders of the outstanding shares of Series B shall vote together with the holders of Common Stock without regard to class, except as to those matters on which separate class voting is required by applicable law or the Company’s Certificate of Incorporation or bylaws.

Securities Not Registered Under the Securities Act of 1933 .

Neither the Preferred Stock nor the Series B has been registered under the Securities Act of 1933, as amended, or the laws of any state of the United States and may not be transferred without such registration or an exemption from registration. The share of Series B and each preferred stock certificate issued upon the transfer of any such share of Series B, shall be stamped or otherwise imprinted with a legend in substantially the following form:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXECPT (i) PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR (ii) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTATION UNDER THE SECURITIES ACT BUT ONLY UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL TO THE COMPANY, OR OTHER COUNSEL REASONABLY ACCEPTABLE TO THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE “BLUE SKY” OR SIMILAR SECURITIES LAW.”

IN WITNESS WHEREOF , the Company has caused this Certificate to be duly executed on its behalf by its undersigned Chairman and Chief Executive Officer as of December _9_, 2015.

	By:	/s/ Kyle Tracey
		Kyle Tracey
		Chairman, Chief Executive Officer

The undersigned further declares under penalty of perjury under the laws of the State of Delaware that the matters set forth in the foregoing Certificate are true and correct of his own knowledge. Executed at Chatsworth, California on this _9__ day of December, 2015.

	By:	/s/ Kyle Tracey
		Kyle Tracey
		Chairman, Chief Executive Officer

Exhibit 10.1

THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

SECURED SERIES B PREFERRED STOCK CONVERTIBLE PROMISSORY NOTE

Principal Amount $50,000.00

Original Issue Date: December 10, 2015

THIS SECURED SERIES B PREFERRED STOCK CONVERTIBLE PROMISSORY NOTE (this “ Note ”) is one of a series of duly authorized and validly issued Secured Series B Preferred Stock Convertible Notes (the “ Notes ”) of Vape Holdings, Inc., a Delaware corporation (the “ Company ”), having its principal place of business at 21822 Lassen Street, Suite A, Chatsworth, CA 91311.

This Note is subject to the following additional provisions:

1. Definitions . For the purposes hereof, in addition to the terms defined elsewhere in this Note, the following terms shall have the following meanings:

“ Bankruptcy Event ” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency, or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof; (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within sixty (60) days after commencement; (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within sixty (60) calendar days after such appointment; (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Company or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment, or restructuring of its debts; or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of, or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.

“ Business Day ” means any day except any Saturday, any Sunday, any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the State of California are authorized or required by law or other governmental action to close.

“ Common Stock ” means the common stock of the Company.

“ Common Stock Equivalents ” means any securities of the Company or its subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants, or other instrument that is at any time convertible into, or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“ Series B Shares ” means, collectively, the shares of Series B Preferred Stock issued or issuable upon conversion of this Note in accordance with the terms hereof.

2. Interest; Prepayment .

(a) Interest Rate . Interest shall accrue daily on the outstanding principal amount of this Note at a rate per annum equal to eight (8%), subject to Section 2(d) hereof.

(b) Payment of Interest . On the Maturity Date, the Company shall pay to the Holder any accrued but unpaid and unconverted interest hereunder on the aggregate unconverted and then outstanding principal amount of this Note, and on each Conversion Date (as defined herein), the Company shall pay to the Holder any accrued but unpaid and unconverted interest hereunder on that portion of the principal amount then being converted. The amount of interest payable on each Conversion Date and the Maturity Date (the “ Interest Amount ”) may be added to, and included with, the principal amount being so converted on such date.

(c) Interest Calculations . Interest shall be calculated on the basis of a three hundred sixty (360)-day year, consisting of twelve (12) thirty (30) calendar day periods, and shall accrue daily commencing on the Original Issue Date, until payment in full of the outstanding principal, together with all accrued and unpaid interest and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note (the “ Note Register ”).

(d) Default Interest . After the occurrence, and during the continuance of, any Event of Default, the interest rate on this Note shall accrue at an interest rate equal to the lesser of sixteen percent (16%) per annum, compounded daily, or the maximum rate permitted under applicable law.

(e) Prepayment . Without prejudice to the Holder’s rights under clause 4 below, the Company may prepay this Note in cash at any time prior to the Maturity Date without penalty upon ten (10) days’ prior written notice to the Holder.

3. Registration of Transfers and Exchanges . Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.

4. Security . The indebtedness evidenced by this Notes is secured by all of the assets and property of the Company.

5. Conversion .

(a) Voluntary Conversion . At any time after the Original Issue Date until this Note is no longer outstanding, this Note shall be convertible, in whole or in part, into the Series B Shares at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 5(c) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (a “ Notice of Conversion ”), specifying therein the principal amount of this Note and any accrued but unpaid interest thereon to be converted and the future date (which may be the same date as the date such notice is deemed effective pursuant to Section 8(a) hereof) on which such conversion shall be effected (such date, the “ Conversion Date ”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). In the event of any dispute or discrepancy, the records of the Company shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this Section 5a) , following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.

(b) Conversion Price . The conversion price shall be $0.01 per share, subject to adjustment herein (the “ Conversion Price ”).

(c) Conversion Limitations . Unless otherwise approved in writing by the Company, any individual conversion under Section 5(a) hereof must be for at least an amount of Five Thousand Dollars ($5,000) of the principal amount of this Note and any accrued but unpaid interest thereon.

(d) Mechanics of Conversion .

(i) Series B Shares Issuable Upon Conversion of Principal Amount . The number of Series B Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (A) the outstanding principal amount of this Note to be converted plus any accrued but unpaid interest thereon, by (B) the Conversion Price.

(ii) Delivery of Certificate Upon Conversion . Not later than five (5) Business Days after each Conversion Date (the “ Share Delivery Date ”), the Company shall deliver, or cause to be delivered, to the Holder a certificate or certificates representing the Series B Shares representing the number of Series B Shares being acquired upon the conversion of this Note.

(iii) Failure to Deliver Certificates . If in the case of any Notice of Conversion such certificate(s) or shares are not delivered to or as directed by the applicable Holder by the fifth (5 ^th ) Business Day after the Conversion Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the certificates representing the principal amount of the Note unsuccessfully tendered for conversion to the Company.

(iv) Reservation of Shares Issuable Upon Conversion . The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Series B Shares for the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such aggregate number of shares of the Series B Shares as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments of Section 6 hereof) upon the conversion of the outstanding principal amount of this Note and payment of interest hereunder. The Company covenants that all shares of Series B Shares that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

(v) Fractional Shares . No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.

(vi) Transfer Taxes . The issuance of certificates for shares of the Series B Shares on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

6. Certain Adjustments .

(a) Stock Dividends and Stock Splits . If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any Series B Shares issued by the Company upon conversion of, or payment of interest on, the Notes); (ii) subdivides outstanding shares of Common Stock into a larger number of shares; (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares; or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 6(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.

(b) Fundamental Transaction . If, at any time while this Note is outstanding, (i) the Company effects any merger or consolidation of the Company with or into another Person, (ii) the Company effects any sale of all, or substantially all, of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (each, a “ Fundamental Transaction ”), then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Series B Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one (1) share of Common Stock (the “ Alternate Consideration ”). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new Note consistent with the foregoing provisions and evidencing the Holder’s right to convert such Note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 6(b) and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. Notice of any such proposed Fundamental Transaction and of such election shall be given to the Holder at least fifteen (15) calendar days before such closing. In connection with such purchase, the Holder shall assign this Note to the Company or its assignee, free and clear of any liens, claims or encumbrances other than transfer restrictions under applicable securities laws.

(c) Calculations . All calculations under this Section 6 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 6 , the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

(d) Notice to the Holder .

(i) Adjustment to Conversion Price . Whenever the Conversion Price is adjusted pursuant to any provision of this Section 6 , the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

(ii) Notice to Allow Conversion by Holder . If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to convert this Note during the twenty (20)-day period commencing on the date of such notice through the effective date of the event triggering such notice.

7. Events of Default .

(a) “ Event of Default ” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body), provided that an event specified in clauses (i), (ii), or (iii) below will not become an Event of Default unless and until it is not cured, if possible to cure, within five (5) Business Days after notice of such failure sent by the Holder:

(i) any default in the payment of (A) the principal amount of any Note or (B) interest and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise);

(ii) the Company shall fail to observe or perform any other covenant or agreement contained in the Notes;

(iii) any representation or warranty made in this Note, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made;

(iv) the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof.

(b) Acceleration Upon Event of Default . If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued but unpaid interest and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash. After the occurrence and during the continuance of any Event of Default, the interest rate on this Note shall accrue as set forth in Section 2(d) hereof. If there is such an acceleration, then upon the payment in full of the outstanding principal amount of this Note, plus accrued but unpaid interest and other amounts owing in respect thereof, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 7(b) .

8. Miscellaneous .

(a) Notices . Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address set forth above, or such other facsimile number or address as the Company may specify for such purpose by notice to the Holder delivered in accordance with this Section 8(a) . Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile number or address appears, at the principal place of business of the Holder. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission or delivery, if such notice or communication is delivered via facsimile at the facsimile number, or delivered by a U.S. nationally recognized overnight courier service to the address, set forth on the signature pages attached hereto prior to 5:30p.m. (Los Angeles time) on a Business Day, (b) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number, or delivered by such courier service to the address, set forth on the signature pages attached hereto on a day that is not a Business Day or later than 5:30 p.m. (Los Angeles time) on any Business Day, or (c) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

(b) Absolute Obligation . Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed.

(c) Lost or Mutilated Note . If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.

(d) Governing Law . All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of California, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the Note (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the County of Los Angeles (the “ Los Angeles Courts ”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the Los Angeles Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such Los Angeles Courts, or such Los Angeles Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses reasonably incurred in the investigation, preparation and prosecution of such action or proceeding.

(e) Waiver . Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver by the Company or the Holder must be in writing.

(f) Severability . If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

(g) Next Business Day . Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

(h) Headings . The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

(i) Assumption . Any successor to the Company or any surviving entity in a Fundamental Transaction shall (i) assume, prior to such Fundamental Transaction, all of the obligations of the Company under this Note pursuant to written agreements in form and substance satisfactory to the Holder (such approval not to be unreasonably withheld or delayed) and (ii) issue to the Holder a new Note of such successor entity evidenced by a written instrument substantially similar in form and substance to this Note, including, without limitation, having a principal amount and interest rate equal to the principal amount and the interest rate of this Note and having similar ranking to this Note, which shall be satisfactory to the Holder (any such approval not to be unreasonably withheld or delayed). The provisions of this Section 8(i) shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations of this Note.

*********************

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

	VAPE HOLDINGS, INC.

	By:	/s/ Ben Beaulieu
	Name:	Ben Beaulieu
	Title:	Chief Operating Officer

	Address for Notice:

	21822 Lassen Street, Suite A
	Chatsworth, CA 91311

ANNEX “A”

NOTICE OF CONVERSION

The undersigned hereby elects to convert principal under the Series B Preferred Stock Convertible Promissory Note (the “Note”) due December 10, 2016 of Vape Holdings, a Delaware corporation (the “Company”), into shares of Series B Preferred Stock (the “Series B Shares”) of the Company according to the conditions hereof, as of the date written below. If Series B Shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.

The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid Series B Shares pursuant to any prospectus.

Conversion calculations:	Date to Effect Conversion:

	Principal Amount of Note to be Converted:


	Interest Accrued on Account of Conversion at Issue:


	Number of shares of Series B Preferred Stock to be issued:


	Signature:

	Name:

	Address for Delivery of Series B Preferred Stock Certificates:

Exhibit 10.2

AMENDED AND RESTATED SECURED SERIES B PREFERRED STOCK
CONVERTIBLE PROMISSORY NOTE

Principal Amount $250,000.00

Original Issue Date: December 10, 2015

THIS SECUREDAMENDED AND RESTATED SERIES B PREFERRED STOCK CONVERTIBLE PROMISSORY NOTE (this “ Note ”) is one of a series of duly authorized and validly issued Secured Series B Preferred Stock Convertible Notes (the “ Notes ”) of Vape Holdings, Inc., a Delaware corporation (the “ Company ”), having its principal place of business at 21822 Lassen Street, Suite A, Chatsworth, CA 91311.

FOR VALUE RECEIVED , the Company promises to pay to HIVE Ceramics, LLC or its registered assigns (the “ Holder ”), or shall have paid pursuant to the terms hereunder, the principal sum of $250,000.00 USD on December 10, 2016 (the “ Maturity Date ”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, or such later date as may be permitted by the Holder as set forth in Section 2 hereof, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof. This Note amends, supplements, modifies and completely restates and supersedes that certain $250,000 Promissory Note, dated as of March 27, 2014, issued by the Company to the Holder with an original principal amount of $250,000 and a maturity date of February 27, 2016.

This Note is subject to the following additional provisions:

1. Definitions . For the purposes hereof, in addition to the terms defined elsewhere in this Note, the following terms shall have the following meanings:

“ Common Stock ” means the common stock of the Company.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“ Series B Shares ” means, collectively, the shares of Series B Preferred Stock issued or issuable upon conversion of this Note in accordance with the terms hereof.

2. Interest; Prepayment .

(a) Interest Rate . Interest shall accrue daily on the outstanding principal amount of this Note at a rate per annum equal to eight (8%), subject to Section 2(d) hereof.

4. Security . The indebtedness evidenced by this Notes is secured by all of the assets and property of the Company.

5. Conversion .

(b) Conversion Price . The conversion price shall be $0.01 per share, subject to adjustment herein (the “ Conversion Price ”).

(d) Mechanics of Conversion .

6. Certain Adjustments .

(d) Notice to the Holder .

7. Events of Default .

(ii) the Company shall fail to observe or perform any other covenant or agreement contained in the Notes;

8. Miscellaneous .

(g) Next Business Day . Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

(h) Headings . The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.

*********************

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.

	VAPE HOLDINGS, INC.

	By:	/s/ Ben Beaulieu
	Name:	Ben Beaulieu
	Title:	Chief Operating Officer

	Address for Notice:

	21822 Lassen Street, Suite A
	Chatsworth, CA 91311

ANNEX “A”

NOTICE OF CONVERSION

Conversion calculations:	Date to Effect Conversion:

	Principal Amount of Note to be Converted:


	Interest Accrued on Account of Conversion at Issue:


	Number of shares of Series B Preferred Stock to be issued:


	Signature:

	Name:

	Address for Delivery of Series B Preferred Stock Certificates:

Exhibit 99.1

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT , dated December 10, 2015 (the “ Agreement ”), is between VAPE HOLDINGS, INC. , a Delaware corporation (the “ Company ”), and Justin Braune (“ Executive ”), an individual. Company and Executive may be referred to herein individually as a “ Party ” or collectively as the “ Parties .”

R E C I T A L S

WHEREAS , Company and Executive mutually desire to enter into an employment relationship whereby Executive shall provide services to the Company in the positions of Chief Executive Officer of the Company.

NOW, THEREFORE , in consideration of the mutual promises herein contained, the parties hereto hereby agree as follows:

AGREEMENT

POSITION AND RESPONSIBILITIES

a. Position . Pursuant to this Agreement, Executive shall render services to the Company as its Chief Executive Officer. Executive shall perform such duties and responsibilities as are normally related to such position in accordance with the standards of the industry and any additional duties now or hereafter assigned to Executive by the Company, including, but not limited to, the duties listed in Exhibit A attached hereto and incorporated by reference herein. Executive shall abide by the rules, regulations, and practices as adopted or modified from time to time in the Company’s sole discretion. Executive is also being appointed as a member of the Board of Directors of the Company.

b. Other Activities . Except upon the prior written consent of the Company, which may be granted or withheld in the Company’s sole discretion, Executive will not, while employed by the Company, (i) engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) that might create a conflict of interest with the Company; (ii) engage, directly or indirectly, in any other business activity or revenue stream (whether or not pursued for pecuniary advantage) presented to or identified by Executive in the same or similar businesses to those of the Company or related to or arising from the operations of the Company.

c. No Conflict . Executive represents and warrants that Executive’s execution of this Agreement, Executive’s employment with the Company, and the performance of Executive’s proposed duties under this Agreement, does not and will not violate any obligations the Executive may have to any other employer, person or entity, including any obligations with respect to proprietary or confidential information of any other person or entity.

COMPENSATION AND BENEFITS

a. Base Salary . In consideration of the services to be rendered under this Agreement, the Company shall pay Executive an annual salary of $150,000 USD (“ Base Salary ”). The Base Salary shall be paid in accordance with the Company’s regularly established payroll practice. The Base Salary will be reviewed from time to time in accordance with the established procedures of the Company for adjusting salaries for similarly situated executives and may be adjusted in the sole discretion of the Company. Executive’s unpaid Base Salary and/or Bonus, as provided in subsection (b) below, shall accrue until paid by the Company. The Company shall have the right, but not the obligation, to pay up to 50% all of Executive’s accrued and unpaid Base Salary and/or Bonus in shares of the Company’s common stock, subject to Executive’s right to defer the receipt of stock compensation until a later date mutually agreed by the parties. The price of Company stock for purposes of this Section 2(a) shall be calculated based on the average fair market value of the Company stock for the month during which the Base Salary and/or Bonus was converted.

b. Bonus . Executive is eligible to receive a discretionary annual bonus, to be determined in the sole and absolute discretion of the Board, of up to fifty percent (50%) of the Base Salary, based upon the Board’s evaluation of the performance of Executive, the Company’s operating results, and such other criteria as may be determined by the Board to be relevant (“ Bonus ”). Executive must be employed on the date such Bonus, if any, is paid in order to be eligible for same. Any accrued and unpaid Bonus may be converted into the Company’s common stock in accordance with the terms set forth in subsection (a) immediately above.

c. Sales-Based Compensation . As additional consideration for the services to be rendered under this Agreement, the Company shall make bi-monthly payments to Executive for the Employment Term (as defined below) equal to $1.00 USD per unit of wholesale sales of Prohibition Products, Inc. (or other chosen name of wholly-owned subsidiary yet to be incorporated) (the “ Portable Vaporizer Subsidiary ”) and $3.00 USD per unit of retail sales of the Portable Vaporizer Subsidiary. The Company shall make these quarterly payments to Executive no later than 45 calendar days following the end of the applicable quarter in which the relevant sales were consummated. For example, payment for sales completed for the quarter ended March 31 must be remitted to Executive not later than May 15.

d. Issuance of Company Stock . In addition to Executive’s Base Salary, discretionary Bonus and Sales-Based Compensation (as set forth above), the Company will issue to Executive twenty million (20,000,000) shares of the Company’s common stock in Executive’s name to be held in escrow for the benefit of Executive (the “Company Common Stock”). The Company Common Stock will vest, and the Company will release the Company Common Stock to Executive, in accordance with the following vesting schedule:

Company shall release to Executive five million (5,000,000) shares of Company’s Common Stock, and such shares shall immediately vest in favor of Executive, on the 6-month anniversary of this Agreement (e.g., June 10, 2016);

ii.

Company shall release to Executive five million (5,000,000) shares of the Company’s common stock, and such shares shall immediately vest in favor of the Executive, on the 12-month anniversary of this Agreement (e.g., December 10, 2016);

iii.

Company shall release to Executive five million (5,000,000) shares of Company’s Common Stock, and such shares shall immediately vest in favor of Executive, on the 18-month anniversary of this Agreement (e.g., June 10, 2017);

iv.

Company shall release to Executive the remaining five million (5,000,000) shares of the Company’s common stock, and such shares shall immediately vest in favor of the Executive, on the 24-month anniversary of this Agreement (e.g., December 10, 2017).

e. Stock Options . In addition to Executive’s Base Salary, discretionary Bonus, Sales-Based Compensation and the Issuance of Company Stock (as set forth above), Executive shall be eligible to participate in any stock option plan maintained by the Company and available to other Company employees. Any stock options granted to Executive under this Section 2(e) will be subject to the terms and conditions applicable to stock options granted under the Company’s stock option plan, as described in that stock option plan and the applicable stock option agreement.

f. Benefits . Executive shall be eligible to participate in the benefits made generally available by the Company to similarly situated employees, if any, in accordance with the benefit plans established by the Company and subject to the terms, conditions, limitations and exclusions of the applicable plans, and as may be amended from time to time in the Company’s sole discretion. The foregoing shall not, in any way, require the Company to establish any such benefits or continue to maintain any such benefits.

g. Expenses . Upon presentation of verifiable invoices and other documentation as may be requested by the Company, the Company shall reimburse Executive for reasonable business expenses incurred in the performance of Executive’s duties hereunder in accordance with the Company’s expense reimbursement guidelines.

TERM OF EMPLOYMENT

a. Employment Term . Executive’s employment shall begin on the date of this Agreement and shall continue for a period of one (1) year, unless terminated earlier by either Party pursuant to Section 4 of this Agreement (the “ Employment Term ”). At the end of the Employment Term, this Agreement will be automatically renewed in increments of one (1) year, unless terminated in writing by the Company or in accordance with Section 4 of this Agreement.

b. Severance . Except in situations where the employment of Executive is terminated For Cause, By Death or By Disability (as defined in Section 4 below), in the event that the Company terminates the employment of Executive at any time, Executive will be eligible to receive an amount equal to the then-current Base Salary of the Executive payable in the form of salary continuation for a three month period following termination. Executive shall not be entitled to any severance payments if Executive’s employment is terminated For Cause, By Death or By Disability (as defined in Section 4 below) or if Executive’s employment is terminated by Executive (in accordance with Section 4 below).

Termination

a. Termination Without Cause . Either Party may terminate this Agreement at any time for any reason or no reason, upon thirty (30) days advance written notice. During such notice period Executive shall continue to diligently perform all of Executive’s duties hereunder. The Company shall have the option, in its sole discretion, to make Executive’s termination effective at any time prior to the end of such notice period as long as the Company pays Executive all compensation to which Executive is entitled up through the last day of the thirty-day notice period. Thereafter all obligations of the Company to the Executive shall cease.

b. Termination by Company on Account of Cause . The Company may, at any time and without notice, terminate Executive’s employment with the Company for Cause. For purposes of this Agreement, “ Cause ” shall mean: (i) an intentional tort (excluding any tort relating to a motor vehicle) which causes substantial loss, damage, or injury to the property or reputation of the Company or its subsidiaries; (ii) any serious crime or intentional, material act of fraud or dishonesty against the Company, (iii) the commission of a felony that results in other than immaterial harm to the Company’s business or the reputation of the Company or Executive, (iv) habitual neglect of Executive’s reasonable duties (for reason other than illness or incapacity) which is not cured within ten days after written notice thereof by the Board to Executive, (v) the disregard of written, material policies of the Company which causes other than immaterial loss, damage, or injury to the property or reputation of the Company which is not cured within ten days after written notice thereof by the Board to Executive, and (vi) any material breach of Executive’s ongoing obligation not to disclose confidential information.

c. Termination By Death . Executive’s employment shall terminate automatically upon the Executive’s death. The Company shall pay to Executive’s beneficiaries or estate, as appropriate, any compensation then due and owing up through the date of Executive’s death. Thereafter all obligations of the Company under this Agreement shall cease. Nothing in this Section 4(c) shall affect any entitlement of Executive’s heirs or devisees to the benefits of any life insurance plan or other applicable benefits.

d. Termination By Disability . If Executive becomes eligible for the Company’s long term disability benefits or if, in the sole opinion of the Company, Executive is unable to carry out the responsibilities and functions of the position held by Executive by reason of any physical or mental impairment for more than ninety consecutive days or more than one hundred and twenty days in any twelve-month period, then, to the extent permitted by law, the Company may terminate Executive’s employment. The Company shall pay to Executive all compensation to which Executive is entitled up through the date of termination, and thereafter all obligations of the Company under this Agreement shall cease. Nothing in this Section 4(d) shall affect Executive’s rights under any disability plan in which Executive is a participant.

e. Release . Notwithstanding the foregoing, it is understood and agreed that the Company’s agreement to provide the benefits set forth in Section 3(b) are in consideration of and in exchange for Executive’s promise to execute, upon termination, a release and waiver, in form and substance acceptable to the Company, releasing the Company from any and all claims and liabilities of every nature related to Executive’s employment by the Company through Executive’s date of termination (the “ Release ”). Accordingly, if Executive refuses to sign the Release or signs the Release but exercises his right, if any, under applicable law to revoke the Release (or any portion thereof), the Company’s obligation to provide the enumerated benefits will immediately terminate without further obligation on the part of the Company.

Termination Obligations

a. Return of Property . Executive agrees that all property (including without limitation all electronic devices, equipment, tangible proprietary information, documents, records, notes, contracts and computer-generated materials) which was furnished, created, or prepared incidentally to Executive’s employment belongs to the Company and shall be promptly returned to the Company upon termination of Executive’s employment.

b. Resignation and Cooperation . Upon termination of Executive’s employment, Executive shall be deemed to have resigned from all officer and management positions then held with the Company. Following any termination of employment and prior to the last day of Executive’s employment, Executive shall reasonably cooperate with the Company in the winding up of pending work on behalf of the Company and the orderly transfer of work to other employees. Executive shall also cooperate with the Company in the defense of any action brought by any third party against the Company that relates to Executive’s employment by the Company at the Company’s sole cost and expense.

CONFIDENTIAL INFORMATION

a. Obligation to Maintain Confidentiality . Executive acknowledges that the continued success of the Company depends upon the use and protection of a large body of confidential and proprietary information. All of such confidential and proprietary information now existing or to be developed in the future will be referred to in this Agreement as “ Confidential Information ”. Confidential Information will be interpreted as broadly as possible to include all information of any sort (whether merely remembered or embodied in a tangible or intangible form) that is (i) related to the Company’s prior, current or potential business and (ii) is not generally or publicly known. Confidential Information includes, without specific limitation, the information, observations and data obtained by Executive during the course of the Employment Term and his performance under this Agreement concerning the business and affairs of the Company, information concerning acquisition opportunities in or reasonably related to the Company’s business or industry of which Executive is aware or becomes aware during the Employment Term, the persons or entities that are current, former or prospective suppliers or customers of any one or more of them during the course of Executive’s performance under this Agreement, as well as development, transition and transformation plans, methodologies and methods of doing business, strategic, marketing and expansion plans, including plans regarding planned and potential sales, financial and business plans, Executive lists and telephone numbers, new and existing programs and services, prices and terms, customer service, integration processes, requirements and costs of providing service, support and equipment. Therefore, Executive agrees that he shall not disclose to any unauthorized person or use for his own account any of such Confidential Information without the Company’s prior written consent, unless and to the extent that any Confidential Information: (i) becomes generally known to and available for use by the public other than as a result of Executive’s acts or omissions to act or (ii) is required to be disclosed pursuant to any applicable law or court order. Executive agrees to deliver to the Company at the end of the Employment Term, or at any other time the Company may request in writing, all memoranda, notes, plans, records, reports and other documents (and copies thereof) relating to the business of the Company (including, without limitation, all Confidential Information) that he may then possess or have under his control.

b. Third Party Information . Executive understands that the Company will receive from third parties confidential or proprietary information (“ Third Party Information ”) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the Employment Term and thereafter, and without in any way limiting the provisions of Section 6, Executive will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than personnel of the Company who need to know such information in connection with their work for the Company) or use, except in connection with his work for the Company, Third Party Information unless expressly authorized in writing by the Manager.

c. Use of Information of Prior Employers . Executive represents and warrants and covenants that Executive shall not disclose to the Company, or use, or induce the Company to use, any proprietary information or trade secrets of others at any time, including but not limited to any proprietary information or trade secrets of any former employer, if any; and Executive acknowledges and agrees that any violation of this provision shall be grounds for Executive’s immediate termination and could subject Executive to substantial civil liabilities and criminal penalties. Executive further specifically and expressly acknowledges that no officer or other Executive or representative of the Company has requested or instructed Executive to disclose or use any such third party proprietary information or trade secrets.

Amendments; Waivers; Remedies

This Agreement may not be amended or waived except by a writing signed by Executive and by a duly authorized representative of the Company other than Executive. Failure to exercise any right under this Agreement shall not constitute a waiver of such right. Any waiver of any breach of this Agreement shall not operate as a waiver of any subsequent breaches. All rights or remedies specified for a party herein shall be cumulative and in addition to all other rights and remedies of the party hereunder or under applicable law.

Assignment; Binding Effect

a. Assignment . The performance of Executive is personal hereunder, and Executive agrees that Executive shall have no right to assign and shall not assign or purport to assign any rights or obligations under this Agreement. This Agreement may be assigned or transferred by the Company; and nothing in this Agreement shall prevent the consolidation, merger or sale of the Company or a sale of any or all or substantially all of its assets.

b. Binding Effect . Subject to the foregoing restriction on assignment by Executive, this Agreement shall inure to the benefit of and be binding upon each of the parties; the affiliates, officers, managers, agents, successors and assigns of the Company; and the heirs, devisees, spouses, legal representatives and successors of Executive.

Notices

All notices or other communications required or permitted hereunder shall be made in writing and shall be deemed to have been duly given if delivered: (a) by hand; (b) by a nationally recognized overnight courier service; or (c) by United States first class registered or certified mail, return receipt requested, to the principal address of the other party. The date of notice shall be deemed to be the earlier of: (i) actual receipt of notice by any permitted means, or (ii) five business days following dispatch by overnight delivery service or the United States Mail. Executive shall be obligated to notify the Company in writing of any change in Executive’s address.

10.

Severability

If any provision of this Agreement shall be held by a court or arbitrator to be invalid, unenforceable, or void, such provision shall be enforced to the fullest extent permitted by law, and the remainder of this Agreement shall remain in full force and effect. In the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall reduce the time period or scope to the maximum time period or scope permitted by law.

11.

Taxes

All amounts paid under this Agreement (including without limitation Base Salary) shall be paid less all applicable state and federal tax withholdings and any other withholdings required by any applicable jurisdiction.

12.

Governing Law; DISPUTE RESOLUTION

The parties agree that any dispute, controversy or claim between Executive and the Company based on, arising out of or relating to Executive’s employment under this Agreement or the termination of same, including, without limitation, any and all claims under Title VII of the Civil Rights Acts of 1964 as amended, the Civil Rights Act of 1870, the Americans with Disabilities Act of 1990 as amended, the Americans with Disabilities Act Amendments Act of 2008, the Age Discrimination in Employment Act as amended, the Older Workers Benefit Protection Act, the Fair Labor Standards Act of 1938 as amended by the Equal Pay Act of 1963, the Lilly Ledbetter Fair Pay Act of 2009, the Family and Medical Leave Act, the Executive Retirement Income Security Act of 1974, the Civil Rights Act of 1991, the Genetic Information Nondiscrimination Act of 2008, the Consolidated Omnibus Budget Reconciliation Act, the U.S. Patriot Act, the Sarbanes-Oxley Act of 2002, the Dodd–Frank Wall Street Reform and Consumer Protection Act, and any other federal, state or local civil rights, disability, discrimination, retaliation or labor law, or any theory of contract, criminal, arbitral or tort law, shall be settled by final and binding arbitration in Los Angeles County, California, administered by the American Arbitration Association (“ AAA ”) pursuant to the National Rules for the Resolution of Employment Disputes of the AAA (“ Rules of the AAA ”). This Agreement shall be construed in accordance with the laws of the State of California without reference to the conflict of laws provisions thereof, and judgment upon any resulting arbitration award may be entered in any court of competent jurisdiction.

13.

Interpretation

This Agreement shall be construed as a whole, according to its fair meaning, and not in favor of or against any party. Sections and section headings contained in this Agreement are for reference purposes only, and shall not affect in any manner the meaning or interpretation of this Agreement. Whenever the context requires, references to the singular shall include the plural and the plural the singular and references to the masculine pronoun shall include the feminine and the neuter, and the singular shall include the plural. This Agreement and the provisions contained herein shall not be construed or interpreted for or against any party hereto because that party drafted or caused that party’s legal representative to draft any of its provisions.

14.

OBLIGATIONS SURVIVE TERMINATION OF EMPLOYMENT

Executive agrees that any and all of Executive’s obligations under this Agreement (other than Section 1) shall survive the termination of employment and the termination of this Agreement in accordance with their terms.

15.

Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement, but all of which together shall constitute one and the same instrument.

16.

Authority

Each party represents and warrants that such party has the right, power and authority to enter into and execute this Agreement and to perform and discharge all of its obligations hereunder; and that this Agreement constitutes the valid and legally binding agreement and obligation of such party and is enforceable in accordance with its terms.

17.

Entire Agreement

This Agreement constitutes the entire agreement of the Company and Executive relating to the subject matter hereof and supersedes all prior oral and written understandings and agreements relating to such subject matter. To the extent that the practices, policies or procedures of the Company, now or in the future, apply to Executive and are inconsistent with the terms of this Agreement, the provisions of this Agreement shall control.

18. EXECUTIVE ACKNOWLEDGEMENT

EXECUTIVE ACKNOWLEDGES EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EXECUTIVE HAS READ AND UNDERSTANDS THE AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS LEGAL EFFECT, AND THAT EXECUTIVE HAS ENTERED INTO IT FREELY BASED ON EXECUTIVE’S OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.

IN WITNESS WHEREOF , the parties have duly executed this Agreement as of the date first written above.

VAPE HOLDINGS, INC.		EXECUTIVE:

By:	/s/ Ben Beaulieu	/s/ Justin Braune
Name:	Ben Beaulieu	JUSTIN BRAUNE
Title:	COO

EXHIBIT A

DESCRIPTION OF EMPLOYMENT DUTIES

Executive shall perform the following services pursuant to the terms of this Agreement:

(1) Holding the position of Chief Executive Officer and associated services, including but not limited to:

(a) general management of the Company,

(b) collaborating with the Board of Directors to develop an overall strategy and vision for the Company;

(b) developing and reviewing budget to support operating plans; and

The above services will be further defined and delineated by the Company’s Board of Directors from time to time as necessary.

Exhibit 99.2

CONSULTING AGREEMENT

This CONSULTING AGREEMENT (this “ Agreement ”) is made as of the 10 ^th day of December, 2015 (the “ Effective Date ”), by and between Vape Holdings, Inc., a Delaware corporation (the “ Company ”), and HIVE Ceramics, LLC (“ Consultant ”).

RECITALS

WHEREAS , Kyle Tracey (managing member of Consultant) is in the process of resigning from his position as Chief Executive Officer as well as all officer and director positions with the Company;

WHEREAS , Kyle Tracey’s employment agreement with the Company is hereby terminated and replaced by this Agreement via his affiliation with Consultant; and

WHEREAS , Company and Consultant mutually desire to enter into a consulting relationship whereby Consultant shall provide services to Company as set forth below.

NOW, THEREFORE , in consideration of the mutual promises herein contained, the parties hereto hereby agree as follows:

AGREEMENT

1. Consulting Relationship . During the term of this Agreement, Consultant will provide consulting services to the Company as described on Exhibit A hereto (the “ Services ”). Consultant represents that Consultant has the qualifications, the experience and the ability to properly perform the Services. Consultant shall use Consultant’s best efforts to perform the Services such that the results are satisfactory to the Company.

2. Fees . As consideration for the Services to be provided by Consultant and other obligations, the Company shall pay to Consultant the consideration specified in Exhibit B hereto at the times specified therein.

3. Expenses . Consultant shall not be authorized to incur on behalf of the Company any expenses and will be responsible for all expenses incurred while performing the Services unless otherwise agreed to by the Company’s Chief Executive Officer, which consent shall be evidenced in writing for any expenses in excess of $1,000.00 USD. As a condition to receipt of reimbursement, Consultant shall be required to submit to the Company reasonable evidence that the amount involved was both reasonable and necessary to the Services provided under this Agreement.

4. Term and Termination . Consultant shall serve as a consultant to the Company for a period commencing on the Effective Date and shall thereafter continue for twenty-four (24) months (the “Term”).

Should either party default in the performance of this Agreement or materially breach any of its obligations under this Agreement, the non-breaching party may terminate this Agreement immediately if the breaching party fails to cure the breach within twenty (20) business days after having received written notice by the non-breaching party of the breach or default.

5. Independent Contractor . Consultant’s relationship with the Company will be that of an independent contractor and not that of an employee.

6. Method of Provision of Services . Consultant shall be solely responsible for determining the method, details and means of performing the Services. Consultant may, at Consultant’s own expense, employ or engage the services of such employees, subcontractors, partners or agents, as Consultant deems necessary to perform the Services (collectively, the “ Assistants ”). The Assistants are not and shall not be employees of the Company, and Consultant shall be wholly responsible for the professional performance of the Services by the Assistants such that the results are satisfactory to the Company.

(a) No Authority to Bind Company . Consultant acknowledges and agrees that Consultant and its Assistants have no authority to enter into contracts that bind the Company or create obligations on the part of the Company without the prior written authorization of the Company.

(b) No Benefits . Consultant acknowledges and agrees that Consultant and its Assistants shall not be eligible for any Company employee benefits and, to the extent Consultant otherwise would be eligible for any Company employee benefits but for the express terms of this Agreement, Consultant (on behalf of itself and its employees) hereby expressly declines to participate in such Company employee benefits.

(c) Withholding; Indemnification . Consultant shall have full responsibility for applicable withholding taxes for all compensation paid to Consultant or its Assistants under this Agreement, and for compliance with all applicable labor and employment requirements with respect to Consultant’s self-employment, sole proprietorship or other form of business organization, and with respect to the Assistants, including state worker’s compensation insurance coverage requirements and any U.S. immigration visa requirements. Consultant agrees to indemnify, defend and hold the Company harmless from any liability for, or assessment of, any claims or penalties with respect to such withholding taxes, labor or employment requirements, including any liability for, or assessment of, withholding taxes imposed on the Company by the relevant taxing authorities with respect to any compensation paid to Consultant or its Assistants.

7. Supervision of Consultant’s Services . All of the services to be performed by Consultant, including but not limited to the Services, will be as agreed between Consultant and the Company’s Chief Executive Officer. Consultant will be required to report to the Chief Executive Officer concerning the Services performed under this Agreement. The nature and frequency of these reports will be left to the discretion of the Chief Executive Officer.

8. Conflicts with this Agreement . Consultant represents and warrants that neither Consultant nor any of the Assistants is under any pre-existing obligation in conflict or in any way inconsistent with the provisions of this Agreement. Consultant represents and warrants that Consultant’s performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by Consultant in confidence or in trust prior to commencement of this Agreement. Consultant warrants that Consultant has the right to disclose and/or or use all ideas, processes, techniques and other information, if any, which Consultant has gained from third parties, and which Consultant discloses to the Company or uses in the course of performance of this Agreement, without liability to such third parties. Notwithstanding the foregoing, Consultant agrees that Consultant shall not bundle with or incorporate into any deliveries provided to the Company herewith any third party products, ideas, processes, or other techniques, without the express, written prior approval of the Company. Consultant represents and warrants that Consultant has not granted and will not grant any rights or licenses to any intellectual property or technology that would conflict with Consultant’s obligations under this Agreement. Consultant will not knowingly infringe upon any copyright, patent, trade secret or other property right of any former client, employer or third party in the performance of the Services.

9. Miscellaneous .

(a) Governing Law . The validity, interpretation, construction and performance of this Agreement, and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

(b) Entire Agreement . This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior or contemporaneous discussions, understandings and agreements, whether oral or written, between them relating to the subject matter hereof.

(c) Amendments and Waivers . No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance.

(d) Successors and Assigns . Except as otherwise provided in this Agreement, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company may assign any of its rights and obligations under this Agreement. No other party to this Agreement may assign, whether voluntarily or by operation of law, any of its rights and obligations under this Agreement, except with the prior written consent of the Company.

(e) Notices . Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such party’s address as set forth on the signature page, as subsequently modified by written notice, or if no address is specified on the signature page, at the most recent address set forth in the Company’s books and records.

(f) Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(g) Construction . This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(h) Counterparts . This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and all of which together shall constitute one and the same agreement. Execution of a facsimile copy will have the same force and effect as execution of an original, and a facsimile signature will be deemed an original and valid signature.

(i) Electronic Delivery . The Company may, in its sole discretion, decide to deliver any documents related to this Agreement or any notices required by applicable law or the Company’s Certificate of Incorporation or Bylaws by email or any other electronic means. Consultant hereby consents to (i) conduct business electronically (ii) receive such documents and notices by such electronic delivery and (iii) sign documents electronically and agrees to participate through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

[Signature Page Follows]

IN WITNESS WHEREOF , the parties have executed this Agreement as of the date first above written.

	THE COMPANY:

	VAPE HOLDINGS, INC., a Delaware corporation

	By:	/s/ Allan Viernes
		(Signature)

	Name:	Allan Viernes
	Title:	Chief Financial Officer

	Address: 21822 Lassen Street, Suite A Chatsworth, CA 91311 United States

	CONSULTANT:

	HIVE Ceramics, llc, a California Limited Liability Company

	By:	/s/ Kyle Tracey
		(Signature)

	Name:	Kyle Tracey
	Title:	Managing Member

	Address :
	____________________
	____________________
	Email:	ktracey01@gmail.com

EXHIBIT A

DESCRIPTION OF CONSULTING SERVICES

1.	Sales and business development.
2.	Other such duties as may be determined by the Company from time to time.

EXHIBIT B

COMPENSATION

1. Base Compensation . For Services rendered by Consultant under this Agreement, during the Term, the Company shall pay Consultant $3,500 per month (“Base Compensation”). The Base Compensation shall be paid in accordance with the Company’s regularly established payroll practice. Consultant’s unpaid Base Compensation shall accrue until paid by the Company. Consultant shall have the right, but not the obligation, to be paid all or a portion of his accrued and unpaid Base Compensation in shares of the Company’s common stock. If at any point during the first month of each calendar quarter, should Consultant desire to convert accrued and unpaid Base Compensation from the immediately preceding quarter into shares of the Company’s common stock, Consultant shall deliver to the Company written notice of his intent to convert accrued and unpaid Base Compensation into stock (“Written Conversion Notice”). The Written Conversion Notice shall contain the total amount of accrued and unpaid Base Compensation from the immediately preceding quarter. The Company shall determine the number of shares of common stock due Consultant by dividing the total accrued and unpaid Base Compensation by the Conversion Price. For purposes of this Agreement, “Conversion Price” shall mean the average fair market value of the Company’s common stock, as reported by OTC Markets Group, Inc. or an equivalent generally accepted reporting service, for the month during which the Company receives the Written Conversion Notice.

2. Royalties . As additional consideration for the services to be rendered under this Agreement, the Company shall make quarterly payments to consultant equal to ten percent (10%) of the gross sales of all HIVE Ceramics products in perpetuity. The Company shall make these quarterly payments to Consultant no later than 45 calendar days following the end of the applicable quarter in which the relevant sales were consummated. For example, payment for sales completed for the quarter ended March 31 must be remitted to Consultant not later than May 15.

Exhibit 99.3

Vape Holdings Announces Justin Braune as New Chief Executive Officer

Current CEO Kyle Tracey to transition into key consulting role

Company announces significant progress with new Vaporizer Pen product

CHATSWORTH, CA / ACCESSWIRE / Dec 11, 2015 / VAPE Holdings, Inc. (VAPE) (the “Company” or “VAPE”) a holding company focused on providing healthy, efficient, and sustainable vaporization products, today announced the appointment of Justin Braune as Chief Executive Officer ("CEO"), effective immediately. Current CEO Kyle Tracey will transition into a consulting role that will better utilize his ability to explore lucrative licensing deals and key strategic partnerships for the Company. Mr. Tracey served as CEO for nearly two years and has led VAPE Holdings through its important formative years of capital formation and brand building.

CEO Kyle Tracey stated, “VAPE Holdings is a great company with diverse customers, outstanding employees and strong growth prospects. I am confident in Justin Braune’s ability to guide our Company through the next phase of its growth as we strive to create superior returns for stockholders. As both a significant shareholder and dedicated advisor, I will continue to be actively involved in several aspects of the Company as we manage this executive transition. By sitting outside the office of CEO, I will be better positioned to leverage meaningful distribution channels for HIVE Ceramics as we grow this industry-leading brand.” Mr. Tracey will remain an active, key participant in VAPE’s operations and has agreed to contribute new capital as well as restructure and extend repayment on existing debt as proof of his ongoing, long-term commitment to VAPE.

Justin Braune brings a broad base of experience to VAPE that ranges across several industries, from semiconductor sales to precious metals and medicinal cannabis. During his tenure at Lear Capital, Mr. Braune partnered with the primary investors of Vapor Wild and FLiP (Flavor Infused Pod), two of the fastest growing companies within the medicinal cannabis vaporizer and e-cigarette vaping industry. During his term as COO, Justin developed deep relationships across the entire supply chain, from product development and manufacturing to sales, marketing and distribution channels. Justin is a graduate of the United States Naval Academy, and served as commissioned officer in the US Navy for ten years where he helped manage nuclear reactor systems aboard the USS Ronald Reagan. He holds an MBA from the University of Southern California’s Marshall School of Business.

“We're very grateful to Kyle for his hard work, vision and commitment to our Company,” said Mr. Braune. “Kyle helped build a strong leadership team and a winning corporate culture. He leaves behind a Company that is committed to constant product innovation in its core HIVE branded ceramics line. Concurrent with Kyle’s departure, we are pleased to announce the outstanding progress that we have made on our new Vaporizer Pen. Small, discreet and ergonomic, it was a major success at the recent Secret Cup Finals on Dec 5 and 6 in Los Angeles, California. This strong reception is emblematic of the many different success stories within the VAPE umbrella. My plan for the future of VAPE is to realign its business focus to that of its ticker and namesake – namely refocusing on vaporization products, e-cigarettes, e-liquids and other consumer-focused product lines. In deciding to re-focus the core business of VAPE on these products we recognize that past overtures into real estate development and management consulting in the cannabis industry (whether due to disruption of capital sources, legal risks associated with the regulatory environment, etc.) is not an area of business that is in the best interests of shareholders. I am excited to build on the strong foundation that Kyle has laid out as we turn a new chapter in the Company’s young history. Shareholders have a lot to look forward to.”

About Vape Holdings, Inc.

VAPE Holdings, Inc. focuses on designing, marketing, and distributing various vaporization products. The company offers medical and food grade ceramic products primarily under the HIVE Ceramics brand throughout North America, Europe and South America. HIVE offers a nonporous, non-corrosive, chemically inert ceramic vaporization element, which can be used for a range of applications, including stand-alone vaporization products and electronic cigarettes. The company is based in Chatsworth, California.

For more information on HIVE Ceramics and to visit our e-commerce site, please visit: http://www.hiveceramics.com .

From time to time, VAPE Holdings will provide market updates and news via its website http://www.vapeholdings.com/ or the Company's Facebook page at http://on.fb.me/1d5c7iO .

Cautionary Language Concerning Forward-Looking Statements

This release contains "forward-looking statements" that include information relating to future events and future financial and operating performance. The words "may," "would," "will," "expect," "estimate," "can," "believe," "potential" and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for VAPE Holdings' products, the introduction of new products, the Company's ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company's liquidity and financial strength to support its growth, and other information that may be detailed from time-to-time in VAPE Holdings' filings with the United States Securities and Exchange Commission. Examples of such forward-looking statements in this release include statements regarding future sales, costs and market acceptance of products as well as regulatory actions at the State or Federal level. For a more detailed description of the risk factors and uncertainties affecting VAPE Holdings please refer to the Company's Securities and Exchange Commission filings, which are available at www.sec.gov . VAPE Holdings undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

Investor Relations:
Hayden IR
917-658-7878
hart@haydenir.com

SOURCE: VAPE Holdings, Inc.