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): February 19, 2016
VAPOR HUB INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
000-55363 |
| 27-3191889 |
(Commission File Number) |
| (IRS Employer Identification No.) |
1871 Tapo Street
Simi Valley, CA 93063
(Address of Principal Executive Offices)(Zip Code)
Registrants telephone number, including area code (805) 309-0530
N/A
(Former Name or Former Address, 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):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement
Amendment to Note Settlement Agreement
On February 19, 2016, Vapor Hub International Inc. (the Company) entered into an Amendment to Note Settlement Agreement (the Settlement Agreement Amendment) with Typenex Co-Investment, LLC (the Investor). The Settlement Agreement Amendment relates to the Note Settlement Agreement (the Original Agreement) entered into between the parties on December 18, 2015.
The Original Agreement, as amended by the Settlement Agreement Amendment, relates to the Secured Convertible Promissory Note issued on November 4, 2014 in the original principal amount of $1,687,500.00 (the November Note) pursuant to that certain Securities Purchase Agreement dated November 4, 2014 by and between the Investor and the Company (the November Purchase Agreement, and together with the November Note and all other documents entered into in conjunction therewith, the November Transaction Documents). The Original Agreement, as amended, also relates to the Promissory Note issued on June 4, 2015 in the original principal amount of $245,000.00 (the June Note, and together with the November Note, the Notes) pursuant to that certain Note Purchase Agreement dated June 4, 2015 (the June Purchase Agreement and together with the June Note and all other documents entered into in conjunction therewith, the June Transaction Documents and together with the November Transaction Documents, the Transaction Documents).
The Original Agreement, as amended by the Settlement Agreement Amendment, restructures the payment provision of the Notes. The Settlement Agreement Amendment restructures the payment provisions contained in the Original Agreement and provides that the Company is to make the following payments to Investor notwithstanding the terms of the Notes (the Restructure): (a) a cash payment in the amount of $35,000.00 payable upon execution of the Settlement Agreement Amendment together with 918,386 shares of the Companys common stock (subject to adjustment as described in the Settlement Agreement Amendment) based on a note conversion amount of $15,000.00 and a conversion price of $0.016333, which shares are to be issued and delivered pursuant to the terms of the Settlement Agreement Amendment and (b) a cash payment on or before March 15, 2016 in the amount of $35,000.00 together with shares of the Companys common stock based on a note conversion amount of $15,000.00 and a conversion price to be determined in accordance with the Notes, which shares are to be issued and delivered pursuant to the terms of the Settlement Agreement Amendment; and (c) a payment equal to the remaining aggregate outstanding balance of the Notes on or before April 15, 2016, which payment must be made in cash (collectively, the Note Payments). Unless specified otherwise by Investor in a written notice delivered to Company, all Note Payments shall be applied first against the outstanding balance of the November Note until the November Note has been paid in full and thereafter against the June Note until the June Note is paid in full.
As consideration for Investors agreement to enter into the Settlement Agreement Amendment, the Company agreed to pay Investor a restructuring fee of $2,500.00.
Upon satisfaction of the Companys obligations under the Original Agreement, as amended, the Company shall be deemed to have paid the entire outstanding balance of the Notes in full and shall have no further obligations under either Note. In addition, subject to the Companys compliance with the terms and conditions of the Original Agreement, as amended, the Investor waives the default caused by the non-payment of the June Note on December 4, 2015.
In the event that the Company fails to comply with the conditions of the Original Agreement, as amended by the Settlement Agreement Amendment, the Restructure, the waiver of the June Note default, and all other accommodations given in the Original Agreement, as amended, will be deemed withdrawn and the Investor will be entitled to all remedies available to it as provided in the Notes, the other Transaction Documents, and the Original Agreement, as amended.
Amendment to Promissory Note
On February 19, 2016, the Company entered into an Amendment to Promissory Note with Iliad Research and Trading L.P., an affiliate of the Investor (the Note Amendment). The Note Amendment relates to the Promissory Note issued on August 12, 2015 in the original principal amount of $245,000 which was scheduled to mature on February 12, 2016. The Note Amendment extends the maturity date of the note to April 12, 2016 and increases the principal amount of the note by $2,500 as consideration for the extension.
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The foregoing summaries of the Settlement Agreement Amendment and Note Amendment do not purport to be complete and are qualified in their entirety by references to the full text of such agreements, which are attached as Exhibits 10.1 and 10.2 hereto.
Item 3.02 Unregistered Sales of Equity Securities.
Pursuant to the Settlement Agreement Amendment, the Company issued to Investor 918,386 shares of the Companys common stock and will be required to issue an unknown number of additional shares of common stock in accordance with the terms of the Settlement Agreement Amendment. The shares are being issued to Investor in reliance upon the exemption from registration provided by Rule 144 of the Securities Act of 1933, as amended.
Item 9.01
Financial Statements and Exhibits
(d)
Exhibits.
The following exhibits are filed herewith:
Exhibit Number | Description of Exhibit | |
10.1 | Amendment to Note Settlement Agreement dated February 19, 2016 by and between Vapor Hub International Inc. and Typenex Co-Investment, LLC. | |
10.2 | Amendment to Promissory Note dated February 19, 2016 by and between Vapor Hub International Inc. and Iliad Research and Trading, L.P. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| VAPOR HUB INTERNATIONAL INC. | |
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Date: | February 25, 2016 | By: | /s/ Lori Winther |
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| Lori Winther |
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| Chief Financial Officer |
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AMENDMENT TO NOTE SETTLEMENT AGREEMENT
This Amendment to Note Settlement Agreement (this Amendment) is entered into as of February 19, 2016, by and between TYPENEX CO-INVESTMENT, LLC, a Utah limited liability company (Lender), and VAPOR HUB INTERNATIONAL INC., a Nevada corporation (Borrower). Capitalized terms used in this Amendment without definition shall have the meanings given to them in that certain Note Settlement Agreement dated December 18, 2015 entered into by and between Lender and Borrower (as amended, the Settlement Agreement).
A.
Borrower previously sold and issued to Lender that certain Secured Convertible Promissory Note issued on November 4, 2014 in the original principal amount of $1,687,500.00 (the November Note) pursuant to that certain Securities Purchase Agreement dated November 4, 2014 by and between Lender and Borrower (the November Purchase Agreement, and together with the November Note and all other documents entered into in conjunction therewith, the November Transaction Documents).
B.
Borrower also previously sold and issued to Lender that certain Promissory Note dated June 4, 2015 in the original principal amount of $245,000.00 (the June Note, and together with the November Note, the Notes) pursuant to that certain Note Purchase Agreement dated June 4, 2015 by and between Lender and Borrower (the June Purchase Agreement, and together with the June Note and all other documents entered into in conjunction therewith, the June Transaction Documents). The June Transaction Documents and the November Transaction Documents are collectively referred to herein as the Transaction Documents.
C.
On December 18, 2015, Borrower and Lender entered into the Settlement Agreement, pursuant to which they agreed to restructure and settle the Notes on the terms set forth therein.
D.
Borrower has requested that Lender alter the terms of the payment schedule set forth in the Settlement Agreement (the Revised Payment Schedule).
E.
Lender has agreed, subject to the terms, amendments, conditions and understandings expressed in this Amendment, to amend the Settlement Agreement to reflect the Revised Payment Schedule.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1.
Recitals. Each of the parties hereto acknowledges and agrees that the recitals set forth above in this Amendment are true and accurate and are hereby incorporated into and made a part of this Amendment.
2.
Revised Payment Schedule. Section 2 of the Settlement Agreement is deleted in its entirety and replaced with the following:
Note Payments. Notwithstanding the terms of the Notes, Borrower covenants and agrees to make the following payments to Lender (the Restructure): (a) a cash payment in the amount of $35,000.00 together with shares of Common Stock (as defined in the November Note) based on a Conversion Amount (as defined in the November Note) of $15,000.00 (the First Note Payment Conversion Amount), delivered subject to the terms and conditions set forth below, with such cash payment received by Lender upon execution of this Amendment and the shares of Common Stock received by Lender within three (3) Trading Days thereof; (b) a cash payment in the amount of $35,000.00 together with shares of Common Stock based on a Conversion Amount of $15,000.00 (the Second Note Payment Conversion Amount, and together with the First Note Payment Conversion Amount, the Note Payment Conversion Amounts), delivered subject to the terms and conditions set forth below, with such cash payment received by Lender on or before March 15, 2016 and the shares of Common Stock received by Lender within three (3) Trading Days thereof; and (c) a payment equal to the remaining aggregate Outstanding Balance of the Notes on or before April 15, 2016, which payment must be made in cash (collectively, the Note Payments). Unless specified otherwise by Lender in a written notice delivered to Borrower (which notice Lender may provide in its sole and absolute discretion), all Note Payments shall be applied first against the Outstanding Balance of the November Note until the November Note has been paid in full and thereafter against the June Note until the June Note has been paid in full. Borrowers delivery of shares of Common Stock (Payment Shares) in connection with the Note Payment Conversion Amounts shall be subject to the following conditions: (i) Lender shall provide to Borrower a Conversion Notice for each Note Payment Conversion Amount that will set forth its calculation of the number of Payment Shares deliverable to Lender with respect to such Note Payment Conversion Amount; (ii) the number of Payment Shares deliverable with respect to each Note Payment Conversion Amount shall be equal to the applicable Note Payment Conversion Amount divided by the then-current Installment Conversion Price (as calculated pursuant to Section 8.1 of the November Note); (iii) all Payment Shares must be delivered in the manner and in accordance with the timeframe set forth in Section 9 of the November Note; (iv) the applicable shares of Common Stock must have been received by Lender or its broker, as applicable, and become Free Trading (as defined below) on or before the applicable due date for such portion of the applicable Note Payment to be deemed to have been timely made; and (v) on the date that is twenty (20) Trading Days from each date Borrower delivers Free Trading shares of Common Stock to Lender, there shall be a true-up where Borrower shall deliver to Lender additional shares of Common Stock on the terms and in the manner set forth in Section 11 of the November Note, provided that for purposes hereof, all references to Installment Conversion Shares shall be deemed to refer to Payment Shares. For the avoidance of doubt, the conditions for payments of the Note Payment Conversion Amounts via Payment Shares set forth above in this Section 2 shall apply to Note Payments made with respect to both the November Note and the June Note and to the extent any necessary term related to the payment of a Note Payment Conversion Amount via Payment Shares is not addressed in this Agreement, but is addressed in the November Note, the provision of the November Note shall apply (provided that if there is any conflict between a term set forth herein and a term set forth in the November Note, this Agreement shall govern), even if the November Note has
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been paid in full. For purposes hereof, the term Free Trading means that (y) the applicable Payment Shares have been cleared and approved for public resale by the compliance departments of Lenders brokerage firm and the clearing firm servicing such brokerage, and (z) such Payment Shares are held in the name of the clearing firm servicing Lenders brokerage firm and have been deposited into such clearing firms account for the benefit of Lender.
3.
Restructure Fee. In consideration of Lenders agreement to implement the Revised Payment Schedule, its fees incurred in preparing this Amendment and other accommodations set forth herein, Borrower agrees to pay to Lender a fee in the amount of $2,500.00 (the Restructure Fee). The Restructure Fee shall be payable to Lender via wire transfer of immediately available funds upon execution of this Amendment.
4.
Failure to Comply. Notwithstanding anything to the contrary in this Amendment, in the event the Restructure Fee is not paid to Lender upon execution of this Agreement or in the event Lender does not receive the Note Payment due on the date hereof together with the applicable Payment Shares, the amendment set forth in Section 2 above to implement the Revised Payment Schedule shall be terminated and further deemed to be void ab initio such that Borrowers payment obligations under the Settlement Agreement shall be as set forth therein as if this Amendment were never entered into. For the avoidance of doubt, the Restructure Fee shall be in addition to Borrowers payment obligations under the Settlement Agreement and shall not reduce Borrowers payment obligations thereunder.
5.
Representations and Warranties. In order to induce Lender to enter into this Amendment, Borrower, for itself, and for its affiliates, successors and assigns, hereby acknowledges, represents, warrants and agrees as follows:
(a)
Borrower has full power and authority to enter into this Amendment and to incur and perform all obligations and covenants contained herein, all of which have been duly authorized by all proper and necessary action. No consent, approval, filing or registration with or notice to any governmental authority is required as a condition to the validity of this Amendment or the performance of any of the obligations of Borrower hereunder.
(b)
There is no fact known to Borrower or which should be known to Borrower which Borrower has not disclosed to Lender on or prior to the date of this Amendment which would or could materially and adversely affect the understanding of Lender expressed in this Amendment or any representation, warranty, or recital contained in this Amendment.
(c)
Except as expressly set forth in this Amendment, Borrower acknowledges and agrees that neither the execution and delivery of this Amendment nor any of the terms, provisions, covenants, or agreements contained in this Amendment shall in any manner release, impair, lessen, modify, waive, or otherwise affect the liability and obligations of Borrower under the terms of the Settlement Agreement.
(d)
Borrower has no defenses, affirmative or otherwise, rights of setoff, rights of recoupment, claims, counterclaims, actions or causes of action of any kind or nature
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whatsoever against Lender, directly or indirectly, arising out of, based upon, or in any manner connected with, the transactions contemplated hereby, whether known or unknown, which occurred, existed, was taken, permitted, or begun prior to the execution of this Amendment and occurred, existed, was taken, permitted or begun in accordance with, pursuant to, or by virtue of any of the terms or conditions of the Settlement Agreement. To the extent any such defenses, affirmative or otherwise, rights of setoff, rights of recoupment, claims, counterclaims, actions or causes of action exist or existed, such defenses, rights, claims, counterclaims, actions and causes of action are hereby waived, discharged and released. Borrower hereby acknowledges and agrees that the execution of this Amendment by Lender shall not constitute an acknowledgment of or admission by Lender of the existence of any claims or of liability for any matter or precedent upon which any claim or liability may be asserted.
(e)
Borrower represents and warrants that as of the date hereof no breaches exist under the Settlement Agreement or have occurred prior to the date hereof.
6.
Certain Acknowledgments. Each of the parties acknowledges and agrees that no property or cash consideration of any kind whatsoever has been or shall be given by Lender to Borrower in connection with any amendment to the Settlement Agreement granted herein.
7.
Other Terms Unchanged. The Settlement Agreement, as amended by this Amendment, remains and continues in full force and effect, constitutes legal, valid, and binding obligations of each of the parties, and is in all respects agreed to, ratified, and confirmed. Any reference to the Settlement Agreement after the date of this Amendment is deemed to be a reference to the Settlement Agreement as amended by this Amendment. If there is a conflict between the terms of this Amendment and the Settlement Agreement, the terms of this Amendment shall control. No forbearance or waiver may be implied by this Amendment. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment to, any right, power, or remedy of Lender under the Settlement Agreement, as in effect prior to the date hereof. For the avoidance of doubt, this Amendment shall be subject to the governing law, venue, and Arbitration Provisions, as set forth in the Settlement Agreement.
8.
No Reliance. Borrower acknowledges and agrees that neither Lender nor any of its officers, directors, members, managers, equity holders, representatives or agents has made any representations or warranties to Borrower or any of its agents, representatives, officers, directors, or employees except as expressly set forth in this Amendment, the Settlement Agreement, and the Transaction Documents and, in making its decision to enter into the transactions contemplated by this Amendment and the Settlement Agreement, Borrower is not relying on any representation, warranty, covenant or promise of Lender or its officers, directors, members, managers, equity holders, agents or representatives other than as set forth in this Amendment and in the Settlement Agreement.
9.
Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. The parties hereto confirm that any electronic copy of another partys executed
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counterpart of this Amendment (or such partys signature page thereof) will be deemed to be an executed original thereof.
10.
Further Assurances. Each party shall do and perform or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Amendment and the consummation of the transactions contemplated hereby.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date set forth above.
LENDER:
TYPENEX CO-INVESTMENT, LLC
By: Red Cliffs Investments, Inc., its Manager
TYPENEX CO-INVESTMENT, LLC
By:
/s/ John Fife
John M. Fife, President
BORROWER:
VAPOR HUB INTERNATIONAL INC.
By:
/s/ Lori Winther
Name:
Lori Winther
Title:
Chief Financial Officer
[Signature page to Amendment to Note Settlement Agreement]
AMENDMENT TO PROMISSORY NOTE
This Amendment to Promissory Note (this Amendment) is entered into as of February 19, 2016, by and between ILIAD RESEARCH AND TRADING, L.P., a Utah limited partnership (Lender), and VAPOR HUB INTERNATIONAL INC., a Nevada corporation (Borrower). Capitalized terms used in this Amendment without definition shall have the meanings given to them in the Note (as defined below).
A.
Borrower previously issued to Lender a Promissory Note dated August 12, 2015 in the original principal amount of $245,000.00 (the Note, and together with all other documents entered into in conjunction therewith, the Transaction Documents).
B.
Borrower has requested that Lender extend the Maturity Date of the Note (the Extension).
C.
Lender has agreed, subject to the terms, amendments, conditions and understandings expressed in this Amendment, to grant the Extension.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1.
Recitals. Each of the parties hereto acknowledges and agrees that the recitals set forth above in this Amendment are true and accurate and are hereby incorporated into and made a part of this Amendment.
2.
Extension. The first sentence of Section 1 of the Note is deleted in its entirety and replaced with the following:
Borrower shall pay to Lender the entire outstanding balance of this Note on or before the date that is eight (8) months from the date hereof.
3.
Extension Fee. In consideration of Lenders grant of the Extension, its fees incurred in preparing this Amendment and other accommodations set forth herein, Borrower agrees to pay to Lender an extension fee in the amount of $2,500.00 (the Extension Fee). The Extension Fee shall be added to the Outstanding Balance of the Note. Lender and Borrower acknowledge and agree that the Outstanding Balance as of the date hereof and immediately following the application of the Extension Fee is $247,500.00.
4.
Representations and Warranties. In order to induce Lender to enter into this Amendment, Borrower, for itself, and for its affiliates, successors and assigns, hereby acknowledges, represents, warrants and agrees as follows:
(a)
Borrower has full power and authority to enter into this Amendment and to incur and perform all obligations and covenants contained herein, all of which have been duly authorized by all proper and necessary action. No consent, approval, filing or registration with or
notice to any governmental authority is required as a condition to the validity of this Amendment or the performance of any of the obligations of Borrower hereunder.
(b)
There is no fact known to Borrower or which should be known to Borrower which Borrower has not disclosed to Lender on or prior to the date of this Amendment which would or could materially and adversely affect the understanding of Lender expressed in this Amendment or any representation, warranty, or recital contained in this Amendment.
(c)
Except as expressly set forth in this Amendment, Borrower acknowledges and agrees that neither the execution and delivery of this Amendment nor any of the terms, provisions, covenants, or agreements contained in this Amendment shall in any manner release, impair, lessen, modify, waive, or otherwise affect the liability and obligations of Borrower under the terms of the Transaction Documents.
(d)
Borrower has no defenses, affirmative or otherwise, rights of setoff, rights of recoupment, claims, counterclaims, actions or causes of action of any kind or nature whatsoever against Lender, directly or indirectly, arising out of, based upon, or in any manner connected with, the transactions contemplated hereby, whether known or unknown, which occurred, existed, was taken, permitted, or begun prior to the execution of this Amendment and occurred, existed, was taken, permitted or begun in accordance with, pursuant to, or by virtue of any of the terms or conditions of the Transaction Documents. To the extent any such defenses, affirmative or otherwise, rights of setoff, rights of recoupment, claims, counterclaims, actions or causes of action exist or existed, such defenses, rights, claims, counterclaims, actions and causes of action are hereby waived, discharged and released. Borrower hereby acknowledges and agrees that the execution of this Amendment by Lender shall not constitute an acknowledgment of or admission by Lender of the existence of any claims or of liability for any matter or precedent upon which any claim or liability may be asserted.
(e)
Borrower represents and warrants that as of the date hereof no Events of Default or other material breaches exist under the Transaction Documents or have occurred prior to the date hereof.
5.
Certain Acknowledgments. Each of the parties acknowledges and agrees that no property or cash consideration of any kind whatsoever has been or shall be given by Lender to Borrower in connection with the Extension or any other amendment to the Note granted herein.
6.
Other Terms Unchanged. The Note, as amended by this Amendment, remains and continues in full force and effect, constitutes legal, valid, and binding obligations of each of the parties, and is in all respects agreed to, ratified, and confirmed. Any reference to the Note after the date of this Amendment is deemed to be a reference to the Note as amended by this Amendment. If there is a conflict between the terms of this Amendment and the Note, the terms of this Amendment shall control. No forbearance or waiver may be implied by this Amendment. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment to, any right, power, or remedy of Lender under the Note, as in effect prior to the date hereof. For the avoidance of doubt, this
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Amendment shall be subject to the governing law, venue, and Arbitration Provisions, as set forth in the Note.
7.
No Reliance. Borrower acknowledges and agrees that neither Lender nor any of its officers, directors, members, managers, equity holders, representatives or agents has made any representations or warranties to Borrower or any of its agents, representatives, officers, directors, or employees except as expressly set forth in this Amendment and the Transaction Documents and, in making its decision to enter into the transactions contemplated by this Amendment, Borrower is not relying on any representation, warranty, covenant or promise of Lender or its officers, directors, members, managers, equity holders, agents or representatives other than as set forth in this Amendment.
8.
Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. The parties hereto confirm that any electronic copy of another partys executed counterpart of this Amendment (or such partys signature page thereof) will be deemed to be an executed original thereof.
9.
Further Assurances. Each party shall do and perform or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Amendment and the consummation of the transactions contemplated hereby.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date set forth above.
BORROWER:
VAPOR HUB INTERNATIONAL INC.
By:
/s/ Lori Winther
Name:
Lori Winther
Title:
Chief Financial Officer
LENDER:
ILIAD RESEARCH AND TRADING, L.P.
By: Iliad Management, LLC, it General Partner
By: Fife Trading, Inc., its Manager
By:
/s/ John Fife
John M. Fife, President
[Signature Page to Amendment to Promissory Note]