8-K

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)       August 26, 2014                                                     

VAPOR CORP.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

000-19001	84-1070932
(Commission File Number)	(IRS Employer Identification No.)

3001 Griffin Road, Dania Beach, Florida	33312
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code   (888) 766-5351  

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:

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))

 

Item 1.02.    Termination of a Material Definitive Agreement.

 On August 26, 2014, Vapor Corp. (the “Company”) and the Company’s  newly formed wholly-owned subsidiary IVGI Acquisition, Inc., a Delaware corporation (the “Buyer”), and International Vapor Group, Inc., a Delaware corporation on behalf of itself and certain of its subsidiaries  (“IVG” and together with such of its subsidiaries, the “Sellers”),  and David Epstein, David Herrera and Nicolas Molina, in their capacities as the representatives of the Sellers and the owners of International Vapor Group, Inc., entered into a letter of termination (the “Termination Letter”), pursuant to which the parties have mutually terminated their previously announced Asset Purchase Agreement entered into on May 14, 2014 and amended on July 25, 2014.

The Company and the Sellers mutually terminated the Asset Purchase Agreement because the parties could not agree upon certain operational and financial matters pertaining to the post-closing integration of the Sellers’ business operations.

There are no current disputes or disagreements between the Company and the Sellers and neither party is liable for any breakup fees or reimbursement of costs to the other party as a result of the termination of the Asset Purchase Agreement.

The Termination Letter also provides, among other matters, that the secured promissory note dated July 28, 2014 made by IVG in favor of the Company in the principal amount of $500,000 and the guaranty thereof by Messrs. Molina, Epstein and Herrera will continue in full force and effect notwithstanding the termination of the Asset Purchase Agreement.

The foregoing description of the Termination Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the Termination Letter, a copy of which is filed as Exhibit 2.1 to this Report and incorporated herein by reference.

On August 27, 2014, the Company issued a press release announcing the parties’ termination of the Asset Purchase Agreement, a copy of which is filed herewith as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

    (d)      Exhibits.

Exhibit
Number	Description
2.1	Termination Letter dated August 26, 2014 by and among Vapor Corp., IVGI Acquisition, Inc. , International Vapor Group, Inc. and Nicolas Molina, David Epstein and David Herrera
99.1	Press Release of Vapor Corp. dated August 27, 2014

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.

	VAPOR CORP.
	(Registrant)
	By:	/s/ Harlan Press
		Harlan Press
		Chief Financial Officer
Date: August 27, 2014

EXHIBIT INDEX

Exhibit No.	Description
2.1	Termination Letter dated August 26, 2014 by and among Vapor Corp., IVGI Acquisition, Inc. , International Vapor Group, Inc. and Nicolas Molina, David Epstein and David Herrera
99.1	Press Release of Vapor Corp. dated August 27, 2014

EX-2.1

EXHIBIT 2.1

August 26, 2014

VIA ELECTRONIC MAIL AND FEDERAL EXPRESS

Mr. Jeffrey E. Holman

Vapor Corp.

3001 Griffin Road

Dania Beach, FL 33312

Re:  Vapor Corp. / International Vapor Group, Inc.

Dear Mr. Holman:

Reference is made to the Asset Purchase Agreement dated May 14, 2014 by and among Vapor Corp. (“VPCO”), IVGI Acquisition, Inc. (“Buyer”), International Vapor Group, Inc. (“IVG”), the Sellers’ Representatives and the other parties thereto, as amended by that certain First Amendment entered into on July 25, 2014 (the “Agreement”), and to the Secured Promissory Note dated July 28, 2014 made by IVG in favor of VPCO (the “Note”). All capitalized terms used but not defined herein shall have the meaning set forth in the Agreement.

Buyer and IVG acknowledge and agree that the Agreement is hereby terminated by the mutual consent of Buyer and IVG pursuant to Section 9.1.1 of the Agreement, effective as of the date of this letter agreement.  Each party hereby releases and discharges the other party from any and all liabilities and obligations under the Agreement, other than pursuant to those provisions that survive the termination of the Agreement.  The parties acknowledge and agree that, notwithstanding any language in the Agreement to the contrary, the only provisions of the Agreement that shall survive the termination of the Agreement are those set forth in Article 9 and Article 10 (other than Section 10.4 and Section 10.17) thereof.  Not in any way limiting the foregoing, in full satisfaction of VPCO’s and its affiliates’ obligations under the Agreement to pay certain expenses of IVG and/or VPCO, VPCO shall pay (i) $5,000 to IVG in respect of fees of Kaufman Rossin & Co. (pursuant to Section 4.7 of the Agreement) and (ii) $45,000 to Mason Retail Group (pursuant to Section 4.11 of the Agreement), and in full satisfaction of IVG’s obligations under the Agreement to pay certain expenses of VPCO and its affiliates, IVG shall pay (iii) $5,233.60 to Greenberg Traurig, P.A. (“GT”) in respect of legal fees and costs of GT (pursuant to Section 4.8.3 of the Agreement and the second sentence of Section 7(e) of the Note), (iv) $1,750 to VPCO in respect of documentary stamp taxes (pursuant to Section 4.8.3 of the Agreement and the second sentence of Section 7(e) of the Note) and (v) $5,500 to VPCO in reimbursement of the deposit paid to Ganassi Design in respect of the build out of store fixtures for the Sawgrass Mills store location. With respect to items (i), (iv) and (v), the net amount owed by IVG to VPCO is $2,250, which amount will be paid by IVG within two business days after the date of execution of this letter agreement. Notwithstanding the foregoing, any and all other obligations and expenses incurred or entered into by VPCO or Buyer directly with a third party in connection with the Store Leases entered into by VPCO or Buyer pursuant to Section 4.11 of the Agreement shall, for the avoidance of doubt, be the sole obligation of VPCO and/or Buyer, as applicable.

VPCO and IVG acknowledge that the unpaid principal amount of the Note is $500,000, and IVG affirms the terms of the Note and acknowledges and agrees that the Note shall remain in full force and effect notwithstanding the termination of the Agreement.  For the avoidance of doubt, VPCO and IVG acknowledge and agree that the termination of the Agreement pursuant to this letter agreement shall not constitute an Event of Default pursuant to the Note.  The Sellers’ Representatives, in their capacities as guarantors under the Guaranty (as such term is defined in the Note), hereby affirm the terms of the Guaranty and acknowledge and agree that the Guaranty shall remain in full force and effect notwithstanding the termination of the Agreement.

VPCO and IVG acknowledge and agree that the Letter Agreement dated on or about January 30, 2014 by and between VPCO and IVG (the “NDA”) is hereby terminated effective as of the date of this letter agreement; however, notwithstanding the foregoing, paragraphs 9, 10, 13, 14, 15 and 16 of the NDA shall remain in full force and effect in accordance with their terms notwithstanding the termination of the NDA and the Agreement.

Each of Buyer and VPCO, on the one hand, and IVG, on the other hand, agrees that neither it nor any of its officers, directors or affiliates shall make any written, verbal or electronic statements, or cause or encourage others to make any written, verbal or electronic statements, that defame or disparage the personal or business reputation, competency, practices, or conduct of the other party or its owners, officers, directors or employees. The parties acknowledge and agree that this prohibition extends to written, verbal or electronic statements made to anyone, including but not limited to, the news media, investors, potential investors, any advisory board, industry analysts, competitors, strategic partners, vendors, employees (past and present), and customers; provided, however, that good faith allegations by any party or its affiliates in litigation shall not violate the terms of this paragraph, nor is this paragraph intended to prohibit normal business competition in the ordinary and customary course of business. The parties acknowledge and agree that this paragraph is a material provision of this letter agreement and that any breach of this paragraph shall be a material breach of this letter agreement, that each party would be irreparably harmed by violation of this provision and that each party shall have the right, in addition to all other remedies available at law or in equity, to obtain injunctive relief to prevent such harm.

The parties agree to cooperate in drafting a joint press release announcing the termination of the Agreement and mutually agree on the contents thereof (the “Press Release”). Each of Buyer and VPCO, on the one hand, and IVG, on the other hand, agrees that, other than the Press Release, it shall not issue any press release, make any public statement or announcement or do any other similar thing with respect to the termination of the Agreement without the prior written consent of the other party; provided, however, that a party may make any filing required under applicable securities laws or under any rules or regulations of any securities exchange on which the securities of such party may be listed or traded without the prior written consent of the other party so long as the content of such filing is not inconsistent with the Press Release (for the avoidance of doubt, the description of this letter agreement and the filing thereof as an exhibit to any such filing shall not be deemed to be inconsistent with the Press Release).

This letter agreement shall be governed under the laws of the State of Delaware, without regard to its conflicts of laws principles. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS LETTER AGREEMENT, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  This letter agreement may be executed in counterparts, each of which shall constitute an original, but all of which, when taken together shall constitute one agreement.

[No further text on this page.]

Very truly yours,
	INTERNATIONAL VAPOR GROUP, INC.
	By:	/s/ Nicolas Molina
		Name: Nicolas Molina
		Title:   CEO
	SELLERS’ REPRESENTATIVES
		/s/ Nicolas Molina
		Nicolas Molina
		/s/ David Epstein
		David Epstein
		/s/ David Herrera
		David Herrera

Accepted and Agreed:
VAPOR CORP.
By:	/s/  Harlan Press
Name:	Harlan Press
Title:	Chief Financial Officer
IVGI ACQUISITION, INC.
By:	/s/  Harlan Press
Name:	Harlan Press
Title:	President

EX-99.1

EXHIBIT 99.1

Vapor Corp. and International Vapor Group

Terminate Asset Purchase Agreement

DANIA BEACH, Fla., August 27, 2014 – Vapor Corp. (NASDAQCM: VPCO; “Vapor” or “the Company”), a leading U.S.-based electronic cigarette and  vaporizer company, today announced that the Company and International Vapor Group, Inc. (www.internationalvapor.com) and certain of its subsidiaries (“IVG”) have mutually terminated their previously announced asset purchase agreement entered into on May 14, 2014 and amended on July 25, 2014.

The Company and IVG mutually terminated the asset purchase agreement because the parties could not agree upon certain operational and financial matters pertaining to the post-closing integration of IVG’s business operations.

There are no current disputes or disagreements between the Company and IVG and neither party is liable for any breakup fees or reimbursement of costs to the other party as a result of the termination of the asset purchase agreement.

About Vapor Corp.

Vapor Corp., a publicly traded company, is a leading U.S. based electronic cigarette company, whose brands include Krave®, VaporX®, Hookah Stix®, Alternacig® and Fifty-One®. We also design and develop private label brands for some of our distribution customers. “Electronic cigarettes” or “e-cigarettes,” and “Vaporizers,” are battery-powered products that enable users to inhale nicotine vapor without smoke, tar, ash or carbon monoxide. Vapor’s electronic cigarettes, vaporizers and accessories are available online, through direct response to our television advertisements and through retail locations throughout the United States. For more information on Vapor Corp. and its e-cigarette and vaporizer brands, please visit us at www.vapor-corp.com.

About International Vapor Group, Inc.

International Vapor Group designs, manufactures, distributes and sells high quality electronic cigarette products that provide customers multiple alternatives to combustible tobacco cigarettes.  A leader in the electronic-cigarette business through the South Beach Smoke®, EverSmoke®, NutriCig® and VaporFiTM brands, IVG is one of the first national e-cig companies to develop and distribute Vaporizers and USA made E-liquids.  IVG distributes and sells through company owned and franchised retail stores, online websites and authorized retailers nationwide. For more information please visit www.internationalvapor.com.

Safe Harbor Statement

This press release contains certain forward-looking statements that are made pursuant to the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements. These forward-looking statements concern Vapor’s operations, economic performance and financial condition and are based largely on Vapor’s beliefs and expectations. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Vapor to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Certain of these factors and risks, as well as other risks and uncertainties are stated in Vapor’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and in Vapor’s subsequent filings with the U.S. Securities and Exchange Commission. These forward-looking statements are made as of the date of this press release, and Vapor assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

Vapor Corp. Contacts:

Media:

Caitlin Kasunich

KCSA Strategic Communications

ckasunich@kcsa.com

(212) 896-1241

Investors:

Jeffrey Goldberger / Garth Russell

KCSA Strategic Communications

jgoldberger@kcsa.com / grussell@kcsa.com

(212) 896-1249  / (212) 896-1250

International Vapor Group, Inc. Contacts:

Nick Molina

International Vapor Group, Inc.

press@internationalvapor.com

(305) 824-4007