VAPE HOLDINGS, INC. (OTCMKTS:VAPE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
| Entry into a Material Definitive Agreement. |
On April 28, 2017, the Board of Directors (the Board) of Vape
Holdings, Inc., a Delaware corporation (the Company), closed the
transactions described below with Kyle Tracey (Tracey) and HIVE
Ceramics, LLC (HIVE). The Company, HIVE and Tracey may be
collectively referred to herein as the Parties. All capitalized
terms used herein, if not otherwise defined, will be as defined
in the Settlement Agreement and Release, including all Exhibits
thereto, attached hereto as Exhibit 10.1.
Settlement Agreement and Release
The HIVE Obligations. On or about February 28, 2014, the
Company entered into an agreement with HIVE by which the Company
acquired certain assets from HIVE (the HIVE Assets). In
conjunction with the purchase of the HIVE Assets and a subsequent
funding by Tracey, the Company entered into two Convertible
Promissory Notes held by HIVE (the HIVE Notes), one for $250,000
and one for $50,000 for a total of $300,000 in principal (the
HIVE Obligations). The HIVE Obligations were secured by the HIVE
Assets.
The Tracey Obligations. Tracey has asserted that the
Company owes him, personally, approximately $200,000.00 which
obligations were represented by lines of credit obtained by
various affiliates of HIVE, monies owed to IP licensees, as well
as monies owed in royalties to a consulting agreement between
Vape and Tracey (the Tracey Obligations).
Prior to entering in the Settlement Agreement and Release
described herein, HIVE and Tracey alleged that the Company
breached its obligations under the HIVE Obligations as well as
the Tracey Obligations. In order to resolve all differences
between the Parties and without any admissions, the Parties
entered into the following Settlement Agreement and Release:
Consideration to HIVE. As consideration to HIVE for the
HIVE Obligations and for a full and complete release of all
claims against the Company, the Company agreed to provide the
following:
1.The Company agreed to use its best efforts to arrange for the
purchase and/or assignment of One Hundred Thousand Dollars
($100,000.000) of the HIVE Notes in exchange for One Hundred
Twenty Thousand Dollars ($120,000.00).
2.The balance of the HIVE Notes (i.e., Two Hundred Thousand
Dollars ($200,000.00)) shall be restated in a Convertible
Promissory Note (the Restated HIVE Note) in the principal amount
of Two Hundred Thousand Dollars ($200,000.00) with the same
general terms and conditions as the HIVE Notes but with a term of
one (1) year and the principal amount of the Restated HIVE Note
shall be convertible, at the option of Tracey, into common stock
of the Company at $.001 per share. The Company also agreed to use
its best efforts to establish, within one hundred twenty (120)
days of the Effective Date, a share reserve with the Companys
Transfer Agent in an amount equal to or greater than the number
of shares issuable upon conversion of the Convertible Promissory
Note referenced herein.
Consideration to Tracey. As consideration to Tracey for
the Tracey Obligations and a full and complete release of all
claims against the Company, the Company agreed to provide the
following:
1.A Convertible Promissory Note attached as Exhibit B to the
Settlement Agreement and Release attached hereto as Exhibit 10.1
(the Tracey Note) in the principal amount of One Hundred Fifty
Thousand Dollars ($150,000.00) with a term of one (1) year from
the date of execution by the Company. The Tracey Note carries no
interest. The principal amount of the Tracey Note is convertible,
at the option of Tracey, into common stock of the Company at
$.001 per share. The Company will also use its best efforts to
establish, within one hundred twenty (120) days of the Effective
Date, a share reserve with the Companys Transfer Agent in an
amount equal to or greater than the number of shares issuable
upon conversion of the Convertible Promissory Note referenced
herein
2.As to Tracey Obligations that are reflected on the Companys
books and records as the Companys debts that Tracey personally
guaranteed during the time he was a Company officer and/or
director, the Company agreed that until paid in full, the Company
would pay a minimum of Seven Thousand Dollars ($7,000.00) per
month toward those obligations.
The foregoing descriptions of the HIVE/Tracey Settlement
Agreement and Release documents are qualified in their entirety
by reference to the full text of the agreements, copies of which
are attached to this Current Report on Form 8-K as Exhibit 10.1
and incorporated by reference into this Item 1.01.
| Item 2.03. |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information provided in response to Item 1.01 of this report
is incorporated by reference into this Item 2.03.
| Item 3.02. | Unregistered Sales of Equity Securities. |
See the disclosures made in Item 1.01, which are incorporated
herein by reference. All securities issued in the HIVE/Tracey
transaction were issued in a transaction exempt from registration
to Section 4(a)(2) of the Securities Act of 1933. The transaction
did not involve a public offering, the sale of the securities was
made without general solicitation or advertising, there was no
underwriter, and no underwriting commissions were paid.
| Item 9.01. | Financial Statements and Exhibits. |
| ExhibitNo. | Description | |
| 10.1 |
Settlement Agreement and Release dated April 28, 2017, entered into by and between Vape Holdings, Inc., HIVE Ceramics, LLC, and Kyle Tracey |
VAPE HOLDINGS, INC. (OTCMKTS:VAPE) Recent Trading Information
VAPE HOLDINGS, INC. (OTCMKTS:VAPE) closed its last trading session at with 4,358,365 shares trading hands.