Form 8-K for VAPE HOLDINGS, INC.
Entry into a Material Definitive Agreement, Creation of a Direct Financial Ob
The Note bears interest at the rate of 10% per annum and is convertible into common stock of the Company at a conversion price per share of 70% of the average of the three (3) lowest Closing Sale Prices in the ten (10) Trading Days immediately preceding the applicable Conversion (subject to adjustment in the event of stock splits, stock dividends, and similar transactions, and in the event of subsequent sales of common stock at a lower purchase price (subject to certain exceptions))(the “Conversion Price”). In no event will the Conversion Price be less than $0.50 per share. Repayment of principal on the Note, together with accrued interest thereon, is due in twelve monthly installments, commencing six months from issuance. The Company may make such payments in cash (in which event the Company will pay a 25% premium) or, subject to certain conditions, in shares of common stock valued at the lower of the Conversion Price or 70% of the average of the three (3) lowest Closing Sale Prices in the ten (10) Trading Days immediately preceding the applicable payment date. The Maturity Date of the Note is seventeen months from the date of issuance. The Company paid a finder’s fee in the amount of $25,000.00 in connection with this transaction.
In connection with the foregoing, the Company relied on the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering.
The foregoing descriptions of the Securities Purchase Agreement and Note do not purport to be complete and are qualified in their entirety by reference to the full text of the documents, which are filed as exhibits to this Current Report on Form 8-K and are incorporated herein by reference. Certain capitalized terms used herein but not otherwise defined shall have the meaning ascribed thereto in the Securities Purchase Agreement or Note.
Exhibit Number Description 10.1 Securities Purchase Agreement, dated December 3, 2014 10.2 Unsecured Convertible Promissory Note, dated December 3, 2014