HCMC Healthier Choices Management Corporation (PK)

As filed with the Securities and Exchange Commission on January 14, 2015

Registration No. 333-201284​

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 1 to

FORM S-4

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

VAPOR CORP.

(Exact name of registrant as specified in its charter)

Please send copies of all communications to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and upon completion of the merger described in the enclosed joint proxy statement-prospectus.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.   ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.   ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of  “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer)

☐

​

Exchange Act Rule 14d-1(d) (Cross Border Third-Party Tender Offer)

☐

​

CALCULATION OF REGISTRATION FEE

*

The maximum number of shares of Vapor Corp. (“Vapor”) common stock estimated to be issuable upon the completion of the merger of Vaporin, Inc. (“Vaporin”) with and into Vapor, based on the number of shares of Vapor and Vaporin common stock outstanding immediately prior to the merger, assuming conversion of all shares of Vaporin preferred stock into Vaporin common stock, and the exchange of each share of Vaporin capital stock for shares of Vapor common stock pursuant to the formula set forth in the Agreement and Plan of Merger, dated as of December 17, 2014, between Vapor and Vaporin.

​

**

Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act and calculated in accordance with Rule 457(f)(1) and Rule 457(c) of the Securities Act as follows: the product of  (1) $1.29, the average of the bid and ask prices per share of Vaporin common stock on December 22, 2014 as quoted on the OTCQB, multiplied by (2) 4,943,252, the sum of the aggregate number of shares of Vaporin common stock outstanding as of December 22, 2014, plus 1,650,000, the aggregate number of shares of Vaporin common stock issuable upon the conversion of Vaporin preferred stock immediately prior to the consummation of the merger.

​

***

Previously paid.

​

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

Information in this joint proxy statement-prospectus is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This joint proxy statement-prospectus shall not constitute an offer to sell or the solicitation of any offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

PROPOSED MERGER — YOUR VOTE IS VERY IMPORTANT

To the Stockholders of Vaporin, Inc. and Vapor Corp.:

We are pleased to report that the Boards of Directors of Vapor Corp. (“Vapor”) and Vaporin, Inc. (“Vaporin”) have approved an Agreement and Plan of Merger (the “merger agreement”). Under the merger agreement, Vaporin will merge with and into Vapor, with Vapor as the surviving company in the merger (the “merger”). We cannot complete the merger transaction without your approval.

Each of Vaporin and Vapor will be holding a special meeting of their respective stockholders to vote on certain matters in connection with the merger. Holders of shares of Vaporin capital stock will vote at a special meeting of the Vaporin stockholders to be held on February 20, 2015 to approve the merger agreement and vote on related proposals. Holders of shares of Vapor common stock will vote at a special meeting of stockholders of Vapor stockholders to be held on February 20, 2015 to approve the merger agreement and vote on related proposals, to ratify the issuance of $1,250,000 of convertible debt and shares of common stock issuable upon conversion thereof, and to approve certain other financing transactions.

Under the terms of the merger agreement, if the merger is completed, Vaporin stockholders will be entitled to collectively receive the number of shares of Vapor common stock representing 45% of the issued and outstanding common stock after consummation of the merger. On January 13, 2015, a date immediately preceding the date of this joint proxy statement-prospectus, the closing price of Vapor common stock was $1.19.

Vapor common stock is listed on the Nasdaq Stock Market LLC under the symbol “VPCO”. Vaporin common stock is not listed on any national securities exchange but is quoted on the OTCQB under the symbol “VAPO.”

We generally expect the merger to be tax-free with respect to the Vapor common stock that Vaporin stockholders receive. The obligations of Vapor and Vaporin to complete the merger are subject to the satisfaction or waiver of several conditions.

If the merger is completed, Vaporin stockholders will collectively own approximately 13,591,549 shares, or approximately 45%, of Vapor’s outstanding common stock, based on the number of shares of Vapor common stock outstanding as of January 13, 2015.

The Vaporin Board of Directors recommends that Vaporin stockholders vote to approve the merger and the related proposals.

The Vapor Board of Directors recommends that Vapor stockholders vote to approve the merger agreement and the issuance of Vapor common stock pursuant to the merger and the related proposals.

Your vote is very important. Whether or not you plan to attend the Vaporin or Vapor special meeting, as applicable, please take the time to vote by completing and mailing the enclosed proxy card to us.

This document, which serves as a joint proxy statement for the special meetings of Vaporin and Vapor stockholders and as a prospectus for the shares of Vapor common stock to be issued in the merger to Vaporin stockholders, gives you detailed information about each respective company’s special meeting and the merger. Please carefully read this entire document, including the “Risk Factors” beginning on page 21 for a discussion of the risks related to the proposed merger. You can also obtain information about both Vaporin and Vapor from documents that each has filed with the Securities and Exchange Commission.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

This joint proxy statement-prospectus is dated January 14, 2015, and is first being mailed to Vaporin and Vapor stockholders on January 20, 2015.

HOW TO GET COPIES OF RELATED DOCUMENTS

This document incorporates important business and financial information about Vapor Corp. that is not included in or delivered with this document. Vapor Corp. stockholders may receive this information free of charge by writing or calling Harlan Press, Chief Financial Officer, Vapor Corp., 3001 Griffin Road, Dania Beach, Florida 33312; telephone number (888) 766-5351.

We will respond to your request as soon as practicable by sending the requested documents by first class mail or other equally prompt means. In order to ensure timely delivery of the documents in advance of the meeting, any request must be made by February 13, 2015, which is five business days before the special stockholder meeting.

Vaporin, Inc.
4400 Biscayne Blvd.
Miami, Florida 33137

Notice of Special Meeting of VAPORIN, INC. Stockholders
to be held on February 20, 2015

At the direction of the Board of Directors of Vaporin, Inc., NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Vaporin, Inc. will be held at 4400 Biscayne Blvd., Miami, FL 33137, on February 20, 2015, at 10:00 a.m. (local time) to consider and vote upon the following matters:

(1)

Approval of the Agreement and Plan of Merger, dated as of December 17, 2014, between Vapor Corp. and Vaporin, Inc. pursuant to which Vaporin, Inc. will merge with and into Vapor Corp.;

​

(2)

Approval, on a non-binding advisory basis, of the compensation of the named executive officers of Vaporin, Inc. based on or related to the merger; and

​

(3)

Approval of a proposal to authorize the Board of Directors to adjourn or postpone the special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the merger agreement or to vote on other matters properly before such special meeting.

​

The Vaporin Board of Directors has fixed January 12, 2015, as the record date for the determination of the stockholders entitled to notice of and to vote at the special meeting, and only stockholders of record on said date will be entitled to receive notice of and to vote at said meeting. A summary of the appraisal rights that may be available to you is described in the section captioned “Proposal 1 of the Vaporin Special Meeting — The Merger — Appraisal Rights” on page 71 of the joint proxy statement-prospectus. Please note that if you wish to exercise appraisal rights you must not vote in favor of approval of the merger. However, so long as you do not return a proxy card at all, it is not necessary to affirmatively vote against or disapprove the merger. In addition, you must take all other steps necessary to perfect your appraisal rights.

The Vaporin, Inc. Board of Directors unanimously recommends that stockholders vote:

(1)

“FOR” approval of the merger agreement;

​

(2)

“FOR” approval, on a non-binding advisory basis, of the compensation of the named executive officers of Vaporin, Inc. based on or related to the merger; and

​

(3)

“FOR” approval of the authorization of the Board of Directors to adjourn or postpone the special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the merger agreement or to vote on other matters properly before such special meeting.

​

By Order of the Board of Directors,

/s/ Scott Frohman                              
Scott Frohman
Chairman of the Board

Miami, Florida
January 14, 2015

IMPORTANT — WHETHER YOU PLAN TO ATTEND THE MEETING IN PERSON OR NOT, PLEASE VOTE PROMPTLY BY SUBMITTING YOUR PROXY BY INTERNET, PHONE OR BY COMPLETING, SIGNING, DATING AND RETURNING YOUR PROXY CARD IN THE ENCLOSED ENVELOPE. RETURNING THE PROXY CARD WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE MEETING.

Vapor Corp.
3001 Griffin Road
Dania Beach, Florida 33312

Notice of Special Meeting of VAPOR CORP. Stockholders
to be held on February 20, 2015

At the direction of the Board of Directors of Vapor Corp., NOTICE IS HEREBY GIVEN that a special meeting of stockholders of Vapor Corp. will be held at 450 E. Las Olas Blvd., Suite 1400, Fort Lauderdale, FL 33301, on February 20, 2015, at 10:00 a.m. (local time) to consider and vote upon the following matters:

(1)

To approve the merger agreement and the issuance of Vapor Corp. common stock, $0.001 par value per share, pursuant to the Agreement and Plan of Merger by and between Vapor Corp. and Vaporin, Inc., dated December 17, 2014;

​

(2)

Ratification of Vapor Corp.’s previous issuance of  $1,250,000 of convertible debt and the common stock issuable upon conversion thereof;

​

(3)

Approval of the issuance of shares of Vapor Corp. common stock in connection with the conversion of up to $1,000,000 in Vaporin convertible debt;

​

(4)

Approval of the issuance of  $3,500,000 of Vapor Corp. common stock and warrants; and

​

(5)

Approval of a proposal to authorize the Board of Directors to adjourn or postpone the special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the merger agreement or to vote on other matters properly before such special meeting.

​

The Vapor Board of Directors has fixed January 12, 2015, as the record date for the determination of the stockholders entitled to notice of and to vote at the special meeting, and only stockholders of record on said date will be entitled to receive notice of and to vote at said meeting.

The Vapor Corp. Board of Directors recommends that stockholders vote:

(1)

“FOR” approval of the merger agreement and the issuance of Vapor Corp. common stock pursuant to the merger agreement;

​

(2)

“FOR” the ratification of the prior issuance of  $1,250,000 of convertible debt and common stock issuable upon conversion thereof;

​

(3)

“FOR” approval of the issuance of shares of Vapor Corp. common stock in connection with the conversion of up to $1,000,000 in Vaporin convertible debt;

​

(4)

“FOR” approval of the issuance of  $3,500,000 of Vapor Corp. common stock and warrants; and

​

(5)

“FOR” approval of the authorization of the Board of Directors to adjourn or postpone the special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the merger agreement or to vote on other matters properly before such special meeting.

​

By Order of the Board of Directors,

Dania Beach, Florida
January 14, 2015

IMPORTANT — WHETHER YOU PLAN TO ATTEND THE MEETING IN PERSON OR NOT, PLEASE VOTE PROMPTLY BY SUBMITTING YOUR PROXY BY INTERNET, PHONE OR BY COMPLETING, SIGNING, DATING AND RETURNING YOUR PROXY CARD IN THE ENCLOSED ENVELOPE. RETURNING THE PROXY CARD WILL NOT PREVENT YOU FROM VOTING IN PERSON IF YOU ATTEND THE MEETING.

Table of Contents

-i-

-ii-

-iii-

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS

Q:

WHAT IS THE PURPOSE OF THIS DOCUMENT?

​

A:   This document serves as both a joint proxy statement of Vaporin, Inc. and Vapor Corp. and a prospectus of Vapor Corp. As a joint proxy statement, it is being provided to Vaporin stockholders because the Vaporin Board of Directors is soliciting their proxy for use at the Vaporin special meeting of stockholders at which the Vaporin stockholders will consider and vote on (i) approval of the merger agreement between Vaporin and Vapor, (ii) approval, on a non-binding advisory basis, of the compensation of the named executive officers of Vaporin based on or related to the merger (the “Executive Compensation Proposal”), and (iii) approval of the authorization of the Vaporin Board of Directors to adjourn or postpone the Vaporin special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the merger agreement or to vote on other matters properly before such special meeting (the “Vaporin Adjournment Proposal”). As a joint proxy statement, it is also being provided to Vapor stockholders because the Vapor Board of Directors is soliciting their proxy for use at the Vapor special meeting of stockholders at which the Vapor stockholders will consider and vote on (i) approval of the merger agreement and the issuance of shares of Vapor common stock to Vaporin stockholders in connection with the merger, (ii) ratification of Vapor’s previous issuance of  $1,250,000 of convertible debt and the common stock issuable upon conversion thereof  (the “Bridge Financing”), (iii) approval of the issuance of shares of Vapor Corp. common stock in connection with the conversion of up to $1,000,000 in Vaporin convertible debt (the “Pre-Closing Financing Proposal”), (iv) approval of the issuance of $3,500,000 of Vapor Corp. common stock and warrants (the “Post-Closing Financing Proposal”), and (v) approval of the authorization of the Vapor Board of Directors to adjourn or postpone the Vapor special meeting to a later date, if necessary or appropriate, to solicit additional proxies in favor of approval of the merger agreement or to vote on other matters properly before such special meeting (the “Vapor Adjournment Proposal”). As a prospectus, it is being provided to Vaporin stockholders because Vapor is offering to exchange shares of its common stock for their shares of Vaporin common stock upon completion of the merger.

Q:

WHAT WILL VAPORIN STOCKHOLDERS RECEIVE IN THE MERGER?

​

A:    Upon completion of the merger, Vaporin stockholders will collectively receive the number of shares of Vapor common stock representing approximately 45% of the issued and outstanding shares of Vapor common stock upon consummation of the merger. Because the number of shares of Vapor common stock to be issued to Vaporin stockholders in the merger is based on the number of shares of Vapor common stock issued and outstanding immediately prior to the consummation of the merger, we cannot calculate the exact number of shares of Vapor common stock to be issued. However, as of the date of this joint proxy statement-prospectus, it is estimated that Vapor will issue approximately 13,591,549 shares of Vapor common stock in the merger, or approximately 2.07 shares for each share of Vaporin common stock. Additionally, Vapor will be assuming the outstanding stock options, warrants and restricted stock units (“RSUs”) held by Vaporin security holders and such number of securities shall be adjusted for the exchange ratio (approximately 2.07).

Q:

HOW DO I VOTE?

​

A:    Shares Held of Record.   If you are a stockholder of record of Vaporin as of the Vaporin record date or a stockholder of record of Vapor as of the Vapor record date, you may submit your proxy before your respective company’s special meeting in one of the following ways:

•

Use the toll-free number shown on your proxy card,

​

•

Visit the website shown on your proxy card to vote via the Internet,

​

•

Complete, sign, date and return the enclosed Vaporin or Vapor proxy card, as applicable, in the enclosed postage-paid envelope, or

​

•

You may also cast your vote in person at your respective company’s special meeting.

​

1

Shares Held in Brokerage Accounts.   If you hold your shares in street name (that is, you hold your shares through a broker, bank or other holder of record), your bank, broker or other holder of record will forward proxy materials and voting instructions that you must follow in order to vote your shares. You may receive more than one proxy card if your shares are registered in different names or are held in more than one account. If you hold your shares in street name and plan to attend the Vaporin meeting or Vapor meeting, as applicable, you should bring either a copy of the voting instruction card provided by your broker or nominee or a recent brokerage statement showing your ownership of Vaporin common stock as of the Vaporin record date or Vapor common stock as of the Vapor record date, as applicable.

Q:

WHY IS THE VOTE OF HOLDERS OF VAPORIN CAPITAL STOCK IMPORTANT?

​

A:    The approval of the merger agreement requires the affirmative vote of the holders of at least a majority of the Vaporin common stock and Vaporin preferred stock, voting as a single class on an as-converted basis, in each case outstanding as of the record date for the Vaporin special meeting. Because the merger agreement requires the conversion of Vaporin preferred stock into Vaporin common stock prior to consummation of the merger, the approval of each series of Vaporin preferred stock, voting as separate classes, is also required, including Series B and Series C. If you do not vote by proxy, telephone or internet or in person at the Vaporin special meeting, it will have the effect of a vote AGAINST approval of the merger agreement, the vote to approve the Executive Compensation Proposal and the Vaporin Adjournment Proposal. Failure to vote may also affect whether a quorum is present.

The Executive Compensation Proposal requires the affirmative vote of a majority of the Vaporin common stock and Vaporin preferred stock present, in person or represented by proxy, and entitled to vote on this proposal. This proposal is advisory in nature and a vote for or against approval will not be binding on Vaporin or the Vaporin Board of Directors.

The Vaporin Adjournment Proposal requires the affirmative vote of holders of a majority of the shares of Vaporin common stock and preferred stock (on an as-converted basis) present, in person or by proxy, and entitled to vote at the Vaporin special meeting.

Q:

WHAT DOES THE VAPORIN BOARD OF DIRECTORS RECOMMEND?

​

A:    The Vaporin Board of Directors has approved the merger agreement and believes that the proposed merger is in the best interests of Vaporin and its stockholders. Accordingly, the Vaporin Board of Directors unanimously recommends that you vote “FOR” approval of the merger agreement and “FOR” the Executive Compensation Proposal.

Additionally, the Vaporin Board of Directors also unanimously recommends a vote “FOR” approval of the Vaporin Adjournment Proposal.

Q:

WHY IS THE VOTE OF HOLDERS OF VAPOR COMMON STOCK IMPORTANT?

​

A:    We are seeking stockholder approval of the merger agreement and the ratification and approval of certain financing transactions to satisfy Nasdaq Listing Rule 5635(a), which requires stockholder approval prior to the issuance of securities in connection with the acquisition of stock or assets of another company if the issuance would constitute more than 20% of the total number of shares of Vapor common stock outstanding before the issuance. If the transaction is completed, Vapor will issue common stock to Vaporin stockholders, which represent the number of shares of Vapor common stock that would equal approximately 45% of the post-closing issued and outstanding shares of Vapor common stock.

The approval of the merger agreement and the issuance of the shares in connection with the merger requires the affirmative vote of a majority of the Vapor common stock outstanding as of the record date.

The approval of the proposal to ratify the Bridge Financing requires the affirmative votes cast by the holders of a majority of the Vapor common stock, present in person or represented by proxy at the Vapor special meeting and entitled to vote thereon.

The approval of the Pre-Closing Financing Proposal and the Post-Closing Financing Proposal each requires the affirmative votes cast by the holders of a majority of the Vapor common stock, present and in person or represented by proxy at the Vapor special meeting and entitled to vote thereon.

2

The Vapor Adjournment Proposal requires the affirmative vote of holders of a majority of the shares of Vapor common stock present, in person or by proxy, and entitled to vote at the Vapor special meeting.

If you do not vote by proxy, telephone or internet or in person at the Vapor special meeting, it will have the effect of a vote AGAINST approval of the merger agreement and the other proposals and may affect whether a quorum is present.

Q:

WHAT DOES THE VAPOR BOARD OF DIRECTORS RECOMMEND?

​

A:    The Vapor Board of Directors has approved the merger agreement at a board meeting at which a quorum was present and all directors in attendance voted in favor of approving the merger agreement. The Vapor Board of Directors believes the proposed merger is in the best interests of Vapor and its stockholders and, accordingly, recommends that you vote “FOR” approval of the merger agreement and the issuance of Vapor common stock in connection with the merger.

The Vapor Board of Directors also recommends a vote “FOR” approval of the proposal to ratify the issuance of convertible debt and common stock in connection with the Bridge Financing, “FOR” the issuance of common stock in connection with the Pre-Closing Financing, “FOR” the issuance of common stock in connection with the Post-Closing Financing, and “FOR” approval of the Vapor Adjournment Proposal.

Q:

IF MY SHARES ARE HELD IN STREET NAME BY MY BROKER, WILL MY BROKER AUTOMATICALLY VOTE MY SHARES FOR ME?

​

A:    No. Your broker cannot vote your shares of Vaporin or Vapor common stock, as applicable, without instructions from you. You should instruct your broker as to how to vote your shares, following the directions your broker provides to you. Please check the voting form used by your broker. Without instructions, your shares will not be voted at your respective company’s special meeting, which will have the effects described above.

Q:

WHAT IF I ABSTAIN FROM VOTING OR FAIL TO INSTRUCT MY BROKER?

​

A:    Abstentions will count as shares of Vaporin or Vapor capital stock, as applicable, represented and entitled to vote at the respective company’s special meeting for purposes of determining a quorum but will not be counted as votes cast. Accordingly, because (i) the proposals to approve the merger agreement require a majority of all outstanding shares entitled to vote and (ii) the other proposals require a majority of all votes present, either in person or by proxy, at each special meeting and entitled to vote thereon, abstentions are effectively a vote AGAINST all of the proposals, including the proposal to approve the merger and the merger agreement.

“Broker non-votes” are proxies received from brokers who, in the absence of specific voting instructions from beneficial owners of shares of Vaporin or Vapor common stock, as applicable, held in brokerage name, are unable to vote such shares in those instances where discretionary voting by brokers is not permitted. Broker non-votes will not be counted toward a quorum at the Vaporin special meeting and the Vapor special meeting, as applicable, and broker non-votes will have the effect of a vote AGAINST approval of the merger agreement at the Vaporin special meeting and a vote AGAINST approval of the merger and issuance of shares of Vapor common stock in connection with the merger at the Vapor special meeting, but will have no effect on any other proposals at the Vaporin or Vapor special meetings since they are not counted as being present at the special meetings. Please see below for a table which describes the vote required for each proposal and the effect of abstentions and broker-non votes.

3

Q:

CAN I CHANGE MY VOTE AFTER I HAVE DELIVERED MY PROXY?

​

A:    You may revoke your grant of a proxy at any time before it is voted by:

•

filing a written revocation of the proxy with the Secretary of Vaporin or Vapor, as the case may be;

​

•

executing a later Internet or telephone vote;

​

•

submitting a signed proxy card bearing a later date to the Secretary of Vaporin or Vapor, as the case may be; or

​

•

attending and voting in person at the respective company’s special meeting.

​

Vaporin stockholders should send written revocations to Jim Martin, Chief Financial Officer, Vaporin, Inc., 4400 Biscayne Blvd., Miami, Florida 33137. Attendance at the Vaporin special meeting will not in and of itself revoke a proxy, unless you choose to cast a ballot at such special meeting.

Vapor stockholders should send written revocations to Harlan Press, Chief Financial Officer, Vapor Corp., 3011 Griffin Road, Dania Beach, Florida 33312. Attendance at the Vapor special meeting will not in and of itself revoke a proxy, unless you choose to cast a ballot at such special meeting.

If you use the Internet, you can change your vote at the Internet address shown on your Vaporin or Vapor proxy card, as applicable. The Internet voting system for Vaporin stockholders is available 24 hours a day until 11:59 p.m., Eastern Time, on February 19, 2015. The Internet voting system for Vapor stockholders is available 24 hours a day until 11:59 p.m., Eastern Time, on February 19, 2015.

If you vote by telephone, you can change your vote by using the toll free telephone number shown on your Vaporin or Vapor proxy card, as applicable. The telephone voting system for Vaporin stockholders is available 24 hours a day in the United States until 11:59 p.m., Eastern Time, on February 19, 2015. The telephone voting system for Vapor stockholders is available 24 hours a day in the United States until 11:59 p.m., Eastern Time, on February 19, 2015.

4

Q:

IF I AM A HOLDER OF VAPORIN CAPITAL STOCK WITH SHARES REPRESENTED BY STOCK CERTIFICATES, SHOULD I SEND IN MY VAPORIN STOCK CERTIFICATES NOW?

​

A:    No. Following the merger, Vaporin stockholders will receive a letter of transmittal from Island Capital Management, LLC, who has been appointed as the exchange agent for the merger, which will provide them with instructions as to how they will exchange their Vaporin capital stock for Vapor common stock. The shares of Vapor common stock that Vaporin stockholders will receive in the merger will be issued in book-entry form. Please do not send in Vaporin stock certificates with the Vaporin proxy card.

Q:

WHAT SHOULD VAPORIN STOCKHOLDERS DO IF THEY HOLD THEIR SHARES OF VAPORIN CAPITAL STOCK IN BOOK-ENTRY FORM?

​

A:    Vaporin stockholders are not required to take any specific actions if their shares of Vaporin capital stock are held in book-entry form. After the completion of the merger, shares of Vaporin capital stock held in book-entry form will automatically be exchanged for shares of Vapor common stock in book-entry form.

Q:

WHO CAN VAPORIN STOCKHOLDERS CONTACT IF THEY CANNOT LOCATE THEIR VAPORIN STOCK CERTIFICATE(S)?

​

A:    If Vaporin stockholders are unable to locate their original Vaporin stock certificate(s), they should contact Jim Martin, Chief Financial Officer, Vaporin, Inc., 4400 Biscayne Blvd., Miami, Florida 33137; telephone number (305) 842-3767.

Q:

WHAT ARE THE TAX CONSEQUENCES OF THE MERGER TO VAPORIN STOCKHOLDERS?

​

A:    We expect that for federal income tax purposes, the merger generally will not be a taxable event to Vaporin stockholders.

We urge Vaporin stockholders to consult with their tax advisors to gain a full understanding of the tax consequences of the merger to them. Tax matters are very complicated, and, in many cases, the tax consequences of the merger will depend on Vaporin stockholders’ particular facts and circumstances. See “Proposal 1 of the Vaporin Special Meeting — The Merger — Material Federal Income Tax Consequences of the Merger,” beginning at page 69.

Q:

DO VAPORIN STOCKHOLDERS HAVE APPRAISAL RIGHTS FROM THE MERGER?

​

A:    Yes. See “Proposal 1 of the Vaporin Special Meeting — The Merger — Appraisal Rights,” beginning at page 71.

Q:

DO VAPOR STOCKHOLDERS HAVE APPRAISAL RIGHTS FROM THE MERGER?

​

A:    No. See “Proposal 1 of the Vapor Special Meeting — Approval of the Merger Agreement and Issuance of Common Stock in Connection with the Merger — No Appraisal Rights,” beginning at page 109.

Q:

ARE THERE ANY REQUIRED REGULATORY OR OTHER CONDITIONS TO THE MERGER?

​

A:    Yes, the Nasdaq listing rules require that Vapor file a notice of listing of additional shares in order for the Vapor common stock to be issued in the merger to be authorized for listing on Nasdaq.

Completion of the merger is also subject to certain other conditions, including there being no material adverse change in the financial condition of Vaporin. See “Proposal 1 of the Vaporin Special Meeting — The Merger — The Merger Agreement — Conditions to Complete the Merger,” beginning at page 81.

Q:

IS THERE OTHER INFORMATION I SHOULD CONSIDER?

​

A:    Yes. Much of the business and financial information about Vapor that may be important to you is not included in this document. Instead, that information is incorporated by reference to documents separately filed by Vapor with the Securities and Exchange Commission (the “SEC”). This means that Vapor may

5

satisfy its disclosure obligations to you by referring you to one or more documents separately filed by it with the SEC. See “Information Incorporated by Reference” beginning at page 115 for a list of documents that Vapor has incorporated by reference into this joint proxy statement-prospectus and for instructions on how to obtain copies of those documents. The documents are available to you without charge.

Q:

WHAT IF THERE IS A CONFLICT BETWEEN DOCUMENTS?

​

A:    You should rely on the LATER FILED DOCUMENT. Information in this joint proxy statement-prospectus may update information contained in one or more of the Vapor documents incorporated by reference. Similarly, information in documents that Vapor may file after the date of this joint proxy statement-prospectus may update information contained in this joint proxy statement-prospectus or information contained in previously filed documents. If disclosure in a later dated document filed with the SEC conflicts with the disclosure contained herein, such disclosure shall supersede the earlier conflicted disclosure.

Q:

WHEN DO YOU EXPECT TO COMPLETE THE MERGER?

​

A:    We are working toward completing the merger as quickly as possible and intend to close the merger in the first half of 2015. We cannot close the merger until after Vaporin stockholders approve the merger agreement, Vapor stockholders approve the merger agreement and the issuance of Vapor common stock in connection with the merger and all closing conditions set forth in the merger agreement have been satisfied.

Q:

WHO SHOULD I CALL WITH QUESTIONS OR TO OBTAIN ADDITIONAL COPIES OF THIS JOINT PROXY STATEMENT-PROSPECTUS?

​

A:    If you have questions about the Vaporin special meeting or if you need additional copies of this joint proxy statement-prospectus, you should contact:

Jim Martin
Chief Financial Officer
Vaporin, Inc.
4400 Biscayne Blvd.
Miami, Florida 33137
Telephone number: (305) 842-3767

If you have questions about the Vapor special meeting or if you need additional copies of this joint proxy statement-prospectus, you should contact:

Jeffrey E. Holman
Chief Executive Officer
Vapor Corp.
3001 Griffin Road
Dania Beach, Florida 33312
Telephone number: (888) 766-5351

6

7

8

9

10

11

12

​

13

14

Date

​

​

Closing Sale Price Per Share of Vapor Common Stock

​

​

Closing Sale Price Per Share of Vaporin Common Stock

​

​

Equivalent Value of Consideration Per Share of Vaporin Common Stock

​

September 30, 2014

​

​

​

$

1.47

​

​

​

​

$

2.70

​

​

​

​

$

3.12

​

​

January 13, 2015

​

​

​

$

1.19

​

​

​

​

$

1.54

​

​

​

​

$

2.46

​

​

15

16

17

​

​

​

Nine Months Ended September 30, 2014

​

​

Year Ended December 31, 2013

​

​

​

​

(In thousands, except per share amounts)

​

Pro Forma Statement of Operations Information

​

​

​

​

​

​

​

​

​

​

​

​

​

Sales, net

​

​

​

$

16,761

​

​

​

​

$

28,259

​

​

Operating (loss) income

​

​

​

​

(9,676)

​

​

​

​

​

596

​

​

Net (loss)

​

​

​

​

(10,821)

​

​

​

​

​

415

​

​

​

​

​

​

$

(0.34)

​

​

​

​

$

0.01

​

​

​

​

​

As of September 30, 2014

​

​

​

​

​

​

(In thousands)

​

​

​

Pro Forma Balance Sheet Information

​

​

​

​

​

​

​

​

​

​

​

​

​

Total current assets

​

​

​

$

14,262

​

​

​

​

Intangible assets

​

​

​

​

1,750

​

​

​

​

Goodwill

​

​

​

​

16,169

​

​

​

​

Total assets

​

​

​

​

32,778

​

​

​

​

Total debt (current)

​

​

​

​

1,200

​

​

​

​

Total liabilities

​

​

​

​

4,141

​

​

​

​

Total stockholders’ equity

​

​

​

​

28,637

​

​

​

​

​

​

18

​

​

​

Historical Vapor

​

​

Historical Vaporin

​

​

Pro Forma Combined

​

Nine Months Ended September 30, 2014

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loss per share:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic

​

​

​

$

(0.45)

​

​

​

​

$

(1.13)

​

​

​

​

$

(0.34)

​

​

Diluted

​

​

​

​

(0.45)

​

​

​

​

​

(1.13)

​

​

​

​

​

(0.34)

​

​

Period-end book value per share

​

​

​

​

0.34

​

​

​

​

​

1.20

​

​

​

​

​

0.88

​

​

Cash dividends per share

​

​

​

$

—

​

​

​

​

$

—

​

​

​

​

$

—

​

​

Year Ended December 31, 2013

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Earnings (loss) per share:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic

​

​

​

$

0.06

​

​

​

​

$

(0.18)

​

​

​

​

$

0.01

​

​

Diluted

​

​

​

​

0.06

​

​

​

​

​

(0.18)

​

​

​

​

​

0.01

​

​

Period-end book value per share

​

​

​

​

0.72

​

​

​

​

​

(0.13)

​

​

​

​

​

1.01

​

​

Cash dividends per share

​

​

​

$

—

​

​

​

​

$

—

​

​

​

​

$

—

​

​

19

​

​

​

Price of Vapor Common Stock and Dividends Declared

​

​

Price of Vaporin Common Stock and Dividends Declared

​

​

​

​

High

​

​

Low

​

​

Dividends

​

​

High

​

​

Low

​

​

Dividends

​

2014:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fourth Quarter (through December 23, 2014)

​

​

​

$

2.81

​

​

​

​

$

1.02

​

​

​

​

$

—

​

​

​

​

$

3.05

​

​

​

​

$

1.45

​

​

​

​

$

—

​

​

Third Quarter

​

​

​

​

5.09

​

​

​

​

​

1.33

​

​

​

​

​

—

​

​

​

​

​

5.00

​

​

​

​

​

2.35

​

​

​

​

​

—

​

​

Second Quarter

​

​

​

​

6.75

​

​

​

​

​

3.90

​

​

​

​

​

—

​

​

​

​

​

8.25

​

​

​

​

​

3.50

​

​

​

​

​

—

​

​

First Quarter

​

​

​

​

9.05

​

​

​

​

​

5.63

​

​

​

​

​

—

​

​

​

​

​

11.00

​

​

​

​

​

2.55

​

​

​

​

​

—

​

​

2013:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fourth Quarter

​

​

​

$

9.80

​

​

​

​

$

4.00

​

​

​

​

$

—

​

​

​

​

$

12.50

​

​

​

​

$

2.00

​

​

​

​

$

—

​

​

Third Quarter

​

​

​

​

5.85

​

​

​

​

​

3.80

​

​

​

​

​

—

​

​

​

​

​

15.00

​

​

​

​

​

6.25

​

​

​

​

​

—

​

​

Second Quarter

​

​

​

​

6.60

​

​

​

​

​

1.95

​

​

​

​

​

—

​

​

​

​

​

27.50

​

​

​

​

​

6.00

​

​

​

​

​

—

​

​

First Quarter

​

​

​

​

4.00

​

​

​

​

​

1.15

​

​

​

​

​

—

​

​

​

​

​

36.25

​

​

​

​

​

17.00

​

​

​

​

​

—

​

​

Date

​

​

Closing Sale Price Per Share of Vapor Common Stock

​

​

Closing Sale Price Per Share of Vaporin Common Stock

​

​

Equivalent Value of Merger Consideration Per Share of Vaporin Common Stock(1)

​

September 30, 2014

​

​

​

$

1.47

​

​

​

​

$

2.70

​

​

​

​

$

3.12

​

​

November 5, 2014

​

​

​

$

2.71

​

​

​

​

$

2.15

​

​

​

​

$

5.61

​

​

January 12, 2015

​

​

​

$

1.23

​

​

​

​

$

1.54

​

​

​

​

$

2.53

​

​

20

RISK FACTORS

In addition to the other information included and incorporated by reference in this document, including the information addressed in “Forward-Looking Statements” beginning on page 29, Vaporin and Vapor stockholders should consider the risks described below as well as those risks described in Vapor’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and Vaporin’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

Risks Related to the Merger

Vaporin stockholders cannot be sure of the number of shares of Vapor common stock they will receive because the actual number of shares is based on the number of outstanding shares of Vapor common stock immediately prior to consummation of the merger, which may change.

Upon completion of the merger, all of the shares of Vaporin common stock (including shares of Vaporin common stock issuable upon conversion of Vaporin preferred stock immediately prior to the merger) will be converted into the right to receive the number of shares of Vapor common stock that collectively represents 45% of the issued and outstanding shares of Vapor common stock immediately following the merger. Because the number of shares of Vapor common stock to be issued to Vaporin stockholders in the merger cannot be precisely determined until the closing date of the merger, Vaporin stockholders will be asked to vote on whether to approve the merger agreement without knowing the exact number of shares of Vapor common stock that will ultimately be issued to them upon the consummation of the merger.

We may fail to realize all of the anticipated benefits of the merger.

The success of the merger will depend, in part, on Vapor’s ability to realize anticipated cost savings and to combine the businesses of Vapor and Vaporin in a manner that permits growth opportunities to be realized and does not materially disrupt the existing customer relationships of Vaporin nor result in decreased revenues due to any loss of customers. However, to realize these anticipated benefits, the businesses of Vapor and Vaporin must be successfully combined and their management teams and employees successfully integrated. If the combined company is not able to achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

The anticipated cost savings from the merger are largely expected to derive from elimination of duplicative costs upon completion of the merger. It is possible that the integration process could result in the loss of key employees, as well as the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies, any or all of which could adversely affect Vapor’s ability to maintain relationships with clients, customers, suppliers and employees after the merger or to achieve the anticipated benefits of the merger. Integration efforts between the two companies will also divert management attention and resources. Some of these risks are beyond the control of either company. A failure to successfully navigate the complicated integration process could have an adverse effect on the combined company.

Vapor may be unable to retain Vaporin’s employees.

The merger involves the integration of two companies that have previously operated independently. The difficulties of combining the operations of the two companies include integrating personnel with diverse business backgrounds, combining different corporate cultures and retaining key employees. However, Vapor may not be successful in retaining those employees who have not agreed to work for Vapor for the time period necessary to successfully integrate Vaporin’s operations with those of Vapor. The loss of Vaporin employees could have an adverse effect on the business and results of operation of Vapor following the merger.

The market price of Vapor common stock after the merger may be affected by factors different from those currently affecting the shares of Vaporin or Vapor common stock.

The businesses of Vapor and Vaporin differ in certain respects and, accordingly, the results of operations of the combined company and the market price of the combined company’s shares of common

21

stock may be affected by factors different from those currently affecting the independent results of operations of Vapor and Vaporin. For a discussion of the businesses of Vapor and Vaporin and of certain factors to consider in connection with those businesses, see the documents incorporated by reference in this document and referred to under “Information Incorporated by Reference” beginning on page 115 as for information about Vapor’s business and see the disclosure beginning at page 36 for information about Vaporin’s business.

The merger agreement limits each party’s ability to pursue an alternative acquisition proposal and may require payment of a termination fee of  $0.5 million, plus reasonable out of pocket expenses, under certain circumstances relating to alternative acquisition proposals.

The merger agreement prohibits each party from initiating, soliciting, knowingly encouraging or engaging in negotiations with, or providing any information to, any third party with respect to alternative acquisition proposals, subject to limited exceptions. Further, each party generally has the opportunity to modify the terms of the merger in response to any competing acquisition proposals that may be made before the other party’s Board of Directors’ withdrawal or modification of its recommendation to stockholders to approve the merger agreement or approve the merger agreement and the issuance of Vapor common stock in connection with the merger agreement, as applicable. The merger agreement also provides for the payment by Vapor or Vaporin of a termination fee in the amount of  $0.5 million, plus reasonable out of pocket expenses, in the event that Vapor or Vaporin terminate the merger agreement for certain reasons. These provisions might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of Vaporin. See “Proposal 1 of the Vaporin Special Meeting — The Merger — The Merger Agreement — Agreement Not to Solicit Other Offers” on page 79.

These provisions could discourage a third party that might have an interest in a potential transaction from considering or proposing that transaction, even if the terms would be more favorable to one of the party’s stockholders.

If the merger is not completed, Vaporin and Vapor will have incurred substantial expenses without realizing the expected benefits of the merger.

Vaporin and Vapor have incurred substantial legal, accounting and investment banking expenses in connection with the negotiation and completion of the transactions contemplated by the merger agreement. If the merger is not completed, Vaporin and Vapor would have to recognize these expenses without realizing the expected benefits of the merger.

Vaporin and Vapor will be subject to business uncertainties and contractual restrictions while the merger is pending.

Uncertainties about the effect of the merger on their businesses may have an adverse effect on Vaporin and Vapor. These uncertainties may also impair the parties’ ability to attract, retain and motivate strategic personnel until the merger is consummated, and could cause third parties to seek to change their existing business relationship, which could negatively impact Vapor upon consummation of the merger. In addition, the merger agreement restricts the parties from taking certain specified actions without the other party’s consent until the merger is consummated or the merger agreement is terminated. These restrictions may prevent both parties from pursuing or taking advantage of attractive business opportunities that may arise prior to the completion of the merger.

The merger is subject to certain closing conditions that, if not satisfied or waived, will result in the merger not being completed, which may cause the market price of Vaporin common stock to decline.

The merger is subject to customary and certain other conditions to closing, including the receipt of required approvals of the Vaporin and Vapor stockholders, the placing into escrow of at least $3.5 million pursuant to a post-closing equity financing transaction, as well as financing commitments from third parties for up to an additional $25 million in post-closing financing (see “Conditions to Complete the Merger” on page 81). If any condition to the merger is not satisfied or, where permitted, waived, the merger will not be completed. In addition, Vapor and/or Vaporin may terminate the merger agreement under certain circumstances even if the merger is approved by Vaporin stockholders.

22

If the merger is not completed, the market price of Vaporin common stock may decline to the extent that the current market price of its shares reflects a market assumption that the merger will be completed. If the merger is not completed, additional consequences could materialize, including any adverse effects from a failure to pursue other beneficial opportunities due to the focus of management on the merger, without realizing any of the anticipated benefits of completing the merger. For more information on closing conditions to the merger agreement, see the section entitled “Proposal 1 of the Vaporin Special Meeting —  The Merger — Merger Agreement — Conditions to Complete the Merger” on page 81.

Vaporin’s directors and executive officers have interests in the merger that differ from the interests of Vaporin’s stockholders.

Vaporin’s executive officers and directors have interests in the merger that are in addition to, and may be different from, the interests of Vaporin stockholders generally. With respect to certain Vaporin executive officers, these interests include acceleration of vesting of their Vaporin equity compensation awards. In addition, certain Vaporin executive officers have entered into employment agreements with Vapor that will become effective upon the closing of the merger. See “Proposal 1 of the Vaporin Special Meeting — The Merger — Interests of Certain of Persons in the Merger — Interests of Vaporin Executive Officers and Directors in the Merger” beginning on page 57 for a discussion of these interests.

Vaporin and Vapor stockholders will have a reduced ownership and voting interest after the merger and will exercise less influence over management.

The stockholders of Vaporin and Vapor currently have the right to vote in the election of each company’s respective Board of Directors and on other matters affecting each such company. When the merger occurs, each Vaporin stockholder that receives shares of Vapor common stock will become a stockholder of Vapor with a percentage ownership of the combined organization that is much smaller than the stockholder’s percentage ownership of Vaporin. Additionally, because Vapor will issue shares of common stock to Vaporin stockholders representing approximately 45% of the outstanding common stock of Vapor immediately following the merger, Vapor’s stockholders will also be diluted to a percentage ownership of the combined organization that is much smaller than the stockholder’s percentage ownership of Vapor prior to the merger. Because of this, Vaporin and Vapor stockholders will have less influence on the management and policies of the combined company than they now have on the management and policies of each company separately.

We may be unable to obtain the financing necessary to complete the transaction.

Pursuant to the merger agreement, Vapor will not be obligated to close the merger unless it receives at least $3.5 million in third party equity financing. See page 114 for a description of this offering. Additionally, Vapor will not be obligated to close the merger unless it has received commitments from third parties to provide up to an additional $25 million in financing, based on the achievement of certain performance metrics. If Vapor does not receive the $3.5 million in equity financing or third party commitments to provide up to an additional $25 million in financing, the merger agreement may not be consummated. If the merger is not consummated, Vapor and Vaporin will have each incurred significant merger-related expenses without receiving any of the anticipated benefits associated with the merger, which could materially and adversely affect each company’s financial condition and results of operation.

The transaction will result in changes to the Vapor Board of Directors that may affect the strategy and operations of the combined company as compared to that of Vapor and Vaporin prior to the merger.

If the parties complete the merger, the composition of the Vapor board of directors will change. In accordance with the merger agreement, following the completion of the merger, the Vapor Board of Directors will continue to be comprised of five directors, but two new directors selected for appointment to the Vapor Board of Directors by the Vaporin Board of Directors will become members of the Vapor Board of Directors. The other three directors will be selected for appointment by the Vapor Board of Directors. This new composition of the Vapor Board of Directors may affect our business strategy and operating decisions following completion of the merger. In addition, there can be no assurances that the new Vapor Board of Directors will function effectively as a team and that there will not be any adverse effects on the combined entity’s business as a result.

23

Vapor’s future results following the merger may differ materially from the unaudited pro forma financial information included in this joint proxy statement-prospectus.

The unaudited pro forma combined financial information contained in this joint proxy statement-prospectus is presented for purposes of presenting Vapor’s historical consolidated financial statements with Vaporin’s historical consolidated financial statements as adjusted to give effect to the merger and is not necessarily indicative of the financial condition or results of operations of the combined company following the merger. The unaudited pro forma combined financial information reflects adjustments, which are based upon preliminary estimates, to allocate the purchase price to Vaporin’s acquired assets and liabilities. The purchase price allocation reflected in this joint proxy statement-prospectus is preliminary, and final allocation of the purchase price will be based upon the fair value of the assets and liabilities of Vaporin as of the date of the completion of the merger. In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect Vapor’s financial condition and results of operations following the merger. Any change in Vapor’s financial condition or results of operations may adversely affect the price of Vapor’s common stock.

The aggregate exchange ratio in the merger is fixed and will not change based on changes in the stock price of either Vapor or Vaporin.

If the merger is consummated, Vaporin stockholders will receive shares of Vapor common stock representing 45% of the issued and outstanding shares of Vapor common stock immediately following consummation of the merger. The number of shares to be issued by Vapor in the merger is purely a function of the number of shares of Vapor common stock issued and outstanding on the closing date of the merger and does not take into account changes in trading prices of either Vapor or Vaporin stock that may occur prior to toe closing of the merger. Thus, the fair market value of Vaporin stock to be exchanged and the Vapor stock to be issued could significantly change between the date of the respective stockholder meeting and the closing date of the merger due to changes in the respective stock prices of the parties. As a result, the parties’ stockholders may receive greater or lesser value than anticipated at the time of the respective stockholder meetings at which such stockholders will vote to approve the proposals described in this joint proxy statement-prospectus.

The combined company may have greater expenses but no greater cash resources.

The expenses of the combined company following the merger are expected to be greater than the operating expenses of each of Vapor and Vaporin individually prior to the merger. However, the cash resources from which the combined company must pay such increased expenses may not similarly increase, especially if the combined company is unable to generate earnings and create positive cash flow. If the combined company’s cash resources are inadequate to pay expenses as they become due in the normal course of operations, the ability of the combined company to continue operating as a going concern would be jeopardized, which would have a material adverse effect on the trading price of Vapor common stock. In 2014, both Vapor and Vaporin have reported losses for each of the first three quarters and expect losses for the fourth quarter.

As a result of the merger, Vapor will record a significant amount of goodwill on its balance sheet, which could result in significant future impairment charges and negatively affect Vapor’s future financial condition, results of operations and stock price.

As discussed further under “Accounting Treatment of the Merger,” applicable acquisition accounting rules require that to the extent that the purchase price paid by Vapor in the merger exceeds the net fair value of the Vapor tangible and intangible assets and liabilities, Vapor will record such assets as goodwill on its consolidated balance sheet. Goodwill is not amortized, but is tested for impairment at least annually. In testing goodwill for impairment, Vapor’s management will be required to analyze its future estimated operating results and cash flows. If the future operating results and cash flows of Vapor do not improve in comparison to its performance in 2014, Vapor may incur significant impairment charges in the future. Any impairment charges will directly be treated as an expense and negatively affect Vapor’s future financial results. Announcement of such impairment charges may also significantly reduce the price of Vapor’s common stock.

24

If Vapor is unable to improve its results of operations, your investment will be adversely affected.

Vaporin’s Board of Directors is recommending to its stockholders that they approve this merger for the reasons described on page 55. However, Vaporin’s stockholders should be aware that Vapor has experienced negative operating results for the last three fiscal quarters. We cannot provide you with any assurance that the merger will result in the combined company generating positive financial results. In the event that Vapor post-merger is unable to improve its financial results, the value of your investment will be adversely affected.

Risks Related to Vaporin’s Business and Operations

Vaporin’s ability to continue as a going concern is in doubt absent obtaining adequate financing and achieving sufficient sales levels.

Vaporin has incurred net losses since inception in April 2011, and anticipates these losses will continue for the foreseeable future. Vaporin has not reached a profitable level of operations which raises substantial doubt about its ability to continue as a going concern. Vaporin’s continued existence is dependent upon it achieving sufficient sales levels of its products and obtaining adequate financing.

Vaporin’s change in its focus of its business in 2014 to the marketing and sale of vaporizers and electronic cigarettes and related products, may not be successful or able compete in this business.

Vaporin may be unable to successfully compete in the vaporizer and electronic cigarette industry. The acquisition of the Vape Store and its operations, including brick and mortar store locations, may not be lucrative or could have other adverse effects that Vaporin does not currently foresee. Failure to successfully compete in the vaporizer and electronic cigarette industry will have a material adverse effect on Vaporin’s business, financial condition and results of operations.

Because Vaporin’s management has a limited recent operating history on which to evaluate its potential for future success and to determine if it will be able to execute its business plan, it is difficult to evaluate Vaporin’s future prospects and the risk of success or failure of its business.

Vaporin, prior to the acquisition of Vaporin Florida, was involved in businesses primarily as a junior mining exploration company. Vaporin not only has limited operating history in executing its new business of marketing and selling vaporizers and electronic cigarettes, but Vaporin’s limited operating history in this sector makes it difficult to evaluate its new business model and future prospects. Vaporin’s management has a limited operating history and therefore it is difficult to evaluate its potential success in the vaporizer and e-cigarette business.

The regulatory impact of the United States Food and Drug Administration’s regulation of electronic cigarettes, including vaporizers and e-liquids, as “tobacco products,” could have adverse consequences to Vaporin’s business.

On April 24, 2014, the FDA released proposed rules that would extend its regulatory authority to electronic cigarettes and certain other tobacco products under the Family Smoking Prevention and Tobacco Control Act of 2009. These rules, as well as numerous other proposed or enacted regulatory initiatives, could have a material adverse effect on Vaporin’s business, results of operations and financial condition. See “Certain Information About Vaporin — About Vaporin’s Business — Government Regulation” below.

Because the medical profession has not yet studied extensively the long-term health effects of vaporizer and electronic cigarette use, if it were determined that the usage of electronic cigarettes posed a health risk, Vaporin’s business could be adversely affected.

Because smoking alternatives, including vaporizers and electronic cigarettes, were recently developed the medical profession has not had a sufficient period of time to study the long-term health effects of their use. Currently, therefore, there is no way of knowing whether or not these products are safe for their intended use. If the medical profession were to determine conclusively that vaporizer and electronic cigarette usage poses long-term health risks, market demand for these products and their use could materially decline, which could have a material adverse effect on Vaporin’s business, results of operations and financial condition.

25

Because the market for vaporizers and electronic cigarettes is a niche market, it subject to a great deal of uncertainty.

Vaporizers and electronic cigarettes, having recently been introduced to market, are at an early stage of development, represent a niche market and are evolving rapidly and are characterized by an increasing number of market entrants. Vaporin’s future sales and any future profits are substantially dependent upon the widespread acceptance and use of electronic cigarettes. Rapid growth in the use of, and interest in, vaporizers and electronic cigarettes is recent, and may not continue on a lasting basis. The demand and market acceptance for these products is subject to a high level of uncertainty.

Therefore, Vaporin is subject to all of the business risks associated with a new enterprise in a niche market, including risks of unforeseen capital requirements, failure of widespread market acceptance of vaporizers and electronic cigarettes, in general or, specifically Vaporin’s products, failure to establish business relationships and competitive disadvantages as against larger and more established competitors.

Because Vaporin faces intense competition, its failure to compete effectively could have a material adverse effect on its business, results of operations and financial condition.

Competition in the vaporizer and electronic cigarette industry is intense. The nature of Vaporin’s competitors is varied as the market is highly fragmented and the barriers to entry are low. Moreover, it appears that large tobacco companies are entering this market. See “Certain Information About Vaporin — About Vaporin’s Business — Competition,” below.

If sales of conventional tobacco cigarettes continue to decline, it could have a material adverse effect on Vaporin’s business.

The overall U.S. market for conventional tobacco cigarettes has generally been declining in terms of volume of sales, as a result of restrictions on advertising and promotions, funding of smoking prevention campaigns, increases in regulation and excise taxes, public perception of the dangers of smoking, a decline in the social acceptability of smoking, and other factors, and such sales are expected to continue to decline. While the sales of vaporizers and electronic cigarettes have been increasing over the last several years, the vaporizer and electronic cigarette markets are only developing and are a fraction of the size of the conventional tobacco cigarette market. A continual decline in tobacco cigarette sales may adversely affect the growth of the vaporizer and electronic cigarette markets, which would have a material adverse effect on Vaporin’s business, results of operations and financial condition.

If Vaporin experiences product liability claims, these claims may adversely affect Vaporin’s reputation and business.

The tobacco industry in general has historically been subject to frequent product liability claims. Vaporin may experience product liability claims from the marketing and sale of these products. Any product liability claim brought against us, with or without merit, could result in:

•

liabilities that substantially exceed Vaporin’s product liability insurance, which it would then be required to pay from other sources, if available;

​

•

an increase of its product liability insurance rates or the inability to maintain insurance coverage in the future on acceptable terms, or at all;

​

•

damage to its reputation and the reputation of its products, resulting in lower sales;

​

•

regulatory investigations that could require costly recalls or product modifications;

​

•

litigation costs; and

​

•

the diversion of management’s attention from managing its business.

​

Any one or more of the foregoing could have a material adverse effect on Vaporin’s business, results of operations and financial condition.

26

Because Vaporin offers a money-back guarantee, product exchanges, returns and warranty claims may adversely affect its business.

If Vaporin is unable to maintain an acceptable degree of quality control of its products, it will incur costs associated with the exchange and return of its products as well as servicing its customers for warranty claims. Any of the foregoing on a significant scale may have a material adverse effect on its business, results of operations and financial condition.

Adverse economic conditions may reduce the demand for Vaporin’s products.

Vaporizers and electronic cigarettes are new to the market and may be regarded by users as a novelty item and expendable. As such, demand for Vaporin’s products may be especially sensitive to economic conditions. When the economy is strong, discretionary spending typically increases; conversely, when economic conditions are unfavorable, discretionary spending often declines. Any significant decline in economic conditions that affects consumer spending could have a material adverse effect on Vaporin’s business, results of operations and financial condition.

If Vaporin is not able to establish sustainable relationships with large retailers or national chains, its results of operations will be adversely affected.

Vaporin believes the fastest way to develop brand and product recognition and increase sales volume is to establish relationships with large retailers and national chains. Vaporin may not be able to establish relationships with large retailers or national chains or, even if it does, sustain such relationships. Vaporin’s inability to develop and sustain relationships with large retailers and national chains will impede its ability to develop brand and product recognition and increase sales volume and, ultimately, require Vaporin to pursue and rely on local and more fragmented sales channels, which may have a material adverse effect on Vaporin’s business, results of operations and financial condition.

If Vaporin is not able to adapt to industry trends, its business will be adversely affected.

Vaporin may not be able to adapt as vaporizer and the electronic cigarette industry and customer demand evolves, whether attributable to regulatory constraints or requirements, a lack of financial resources or its failure to respond in a timely and/or effective manner to new technologies, customer preferences, changing market conditions or new industry developments. Any of the failures to adapt for the reasons cited herein or otherwise could make Vaporin’s products obsolete and would have a material adverse effect on Vaporin’s business, financial condition and results of operations.

Because Vaporin relies on third party suppliers and manufacturers for components of its products, any interruption with these relationships could adversely affect its business.

Vaporin depends on third party suppliers and manufacturers for certain components of its vaporizers and electronic cigarettes, which includes, but is not limited to, certain electrical components and technology. Customers associate certain characteristics of Vaporin products, including the weight, feel, draw, packaging and other unique attributes of Vaporin products to the brands it markets, distributes and sells. Any interruption in supply and/or consistency of Vaporin products may adversely impact its ability to deliver its products to wholesalers, distributors and customers and otherwise harm Vaporin’s relationships and reputation with customers. Although Vaporin believes that several alternative sources for the components, chemical constituents and manufacturing services necessary for the production of its products are available, any failure to obtain any of the foregoing would have a material adverse effect on Vaporin’s business, results of operations and financial condition.

If Vaporin cannot manage its growth effectively, it may not become profitable.

Businesses which grow rapidly often have difficulty managing their growth. If Vaporin grows as rapidly as management anticipates, Vaporin will need to expand its management by recruiting and employing experienced executives and key employees capable of providing the necessary support. Vaporin’s failure to manage its growth effectively could have a material adverse impact on Vaporin’s business, results of operations and financial condition.

27

Vaporin faces a competitive disadvantage from foreign importers who do not comply with government regulation.

Vaporin faces competition from foreign sellers of electronic cigarettes that may illegally ship their products into the United States for direct delivery to customers. These market participants will not have the added cost and expense of complying with U.S. regulations and taxes and as a result will be able to offer their product at a more competitive price than us and potentially capture market share. This competitive disadvantage may have a material adverse effect on Vaporin’s business, results of operations and financial condition.

If Vaporin’s products are taxed like other tobacco products or if Vaporin is required to collect and remit sales tax on certain of its Internet sales, Vaporin’s business, results of operations and financial condition could be adversely affected.

Presently the sale of vaporizers and electronic cigarettes is not subject to federal, state and local excise taxes to the same extent as the sale of conventional cigarettes or other tobacco products, all of which have faced significant increases in the amount of taxes collected on their sales. Should federal, state and local governments and or other taxing authorities impose excise taxes similar to those levied against conventional cigarettes and tobacco products on its products, it may have a material adverse effect on the demand for Vaporin’s products, as consumers may be unwilling to pay the increased costs for its products.

Vaporin may be unable to establish the systems and processes needed to track and submit the excise and sales taxes collected through Internet sales, which would limit its ability to market products through its website. The requirement to collect, track and remit sales taxes based on independent affiliate sales may require Vaporin to increase prices, which may affect demand for its products or conversely reduce its net profit margin, either of which would have a material adverse effect on Vaporin’s business, results of operations and financial condition.

If Vaporin’s Internet security is circumvented, its reputation and business could be adversely affected.

At present Vaporin generates a portion of its sales through e-commerce sales on its websites. Vaporin manages its websites and e-commerce platform internally and, as a result, any compromise of its security or misappropriation of proprietary information could have a material adverse effect on Vaporin’s business, financial condition and results of operations. Vaporin relies on encryption and authentication technology licensed from third parties to provide the security and authentication necessary to effect secure Internet transmission of confidential information, such as credit and other proprietary information. Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments may result in a compromise or breach of the technology used by Vaporin to protect client transaction data. Anyone who is able to circumvent Vaporin’s security measures could misappropriate proprietary information or cause material interruptions in its operations. Vaporin may be required to expend significant capital and other resources to protect against security breaches or to minimize problems caused by security breaches. To the extent that Vaporin’s activities or the activities of others involve the storage and transmission of proprietary information, security breaches could damage Vaporin’s reputation and expose it to a risk of loss and/or litigation. Vaporin’s security measures may not prevent security breaches. Vaporin’s failure to prevent these security breaches may result in consumer distrust and may adversely affect its business, results of operations and financial condition.

Vaporin is an early stage company and therefore is subject to additional risks, uncertainties, expenses and difficulties frequently encountered with respect to early stage businesses.

Vaporin is in the early stages of operations. The prospects for early stage companies must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered with respect to businesses in their early stages of operations. These businesses must compete with established competitors having substantially greater experience and resources. Failure by Vaporin or, following the closing of the merger, Vapor to implement or execute business strategies successfully, could have a material adverse effect on Vaporin’s or Vapor’s business, financial condition, results of operations, and cash flows.

28

FORWARD-LOOKING STATEMENTS

This joint proxy statement-prospectus, including information included or incorporated by reference in this joint proxy statement-prospectus, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about the benefits of the merger between Vapor and Vaporin, including future financial and operating results and performance; statements about Vapor’s and Vaporin’s plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “views,” “seeks,” “estimates,” “predicts,” “continues,” “allows,” “reflects,” “typically,” “usually,” “will,” “should,” “may” or the negative of these terms or words of similar meaning. These forward-looking statements are based upon the current beliefs and expectations of Vapor’s and Vaporin’s management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond the control of Vapor and Vaporin. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements.

The following factors, among others, including the risks and uncertainties listed in “Risk Factors” beginning on page 21 of this joint proxy statement-prospectus, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

•

the failure of the parties to satisfy the closing conditions in the merger agreement in a timely manner or at all, including raising the $3.5 million which must be in escrow and obtain future financing commitments from third parties of up to $25 million;

​

•

the failure of the stockholders of Vaporin approve the merger agreement or stockholders of Vapor to approve the merger agreement and the issuance of Vapor common stock in connection with the merger;

​

•

the failure to satisfy other conditions to the merger on the proposed terms and within the proposed timeframe;

​

•

disruptions to the businesses of Vapor and Vaporin as a result of the announcement and pendency of the merger;

​

•

the risk that the businesses of Vapor and Vaporin may not be combined successfully, or such combination may take longer or be more difficult, time-consuming or costly to accomplish than expected;

​

•

weakness or unexpected decline in the U.S. economy;

​

•

higher than expected costs and expenses incurred in connection with the merger, or in connection with litigation relating to the merger;

​

•

lack of liquidity to fund Vapor’s and Vaporin’s various cash obligations;

​

•

legislative and regulatory actions subject Vapor and Vaporin to additional regulatory oversight which may result in increased compliance costs and/or require Vapor and Vaporin to change their business model;

​

•

changes in accounting or tax policies or accounting standards;

​

•

Vapor’s and Vaporin’s inability to promptly adapt to changes in technology or trends;

​

•

Vapor’s and Vaporin’s internal controls and procedures may not be adequate to prevent losses;

​

•

the possibility that litigation may be brought pertaining to fiduciary responsibility and other matters or that existing litigation may have unanticipated consequences;

​

•

the possibility that the expected benefits of this acquisition will not be fully realized by Vapor;

​

•

the inability to realize expected cost savings and synergies from the merger of Vaporin with Vapor in the amounts or in the timeframe anticipated;

​

29

•

costs or difficulties relating to integration matters might be greater than expected;

​

•

material adverse changes in Vapor’s or Vaporin’s operations or earnings;

​

•

the inability to retain Vaporin’s customers and employees; and

​

•

other unexpected material adverse changes in Vapor’s or Vaporin’s future results of operations and cash flow.

​

Additional factors that could cause Vapor’s and Vaporin’s results to differ materially from those described in the forward-looking statements can be found in Vapor’s and Vaporin’s filings with the SEC, including their respective Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.

You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this joint proxy statement-prospectus or the date of any document incorporated by reference in this joint proxy statement-prospectus. All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this joint proxy statement-prospectus and attributable to Vapor or Vaporin or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Vapor and Vaporin undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this joint proxy statement-prospectus or to reflect the occurrence of unanticipated events.

30

CERTAIN INFORMATION ABOUT VAPOR

General

We were originally incorporated as Consolidated Mining International, Inc. in 1985 as a Nevada corporation, and changed our name in 1987 to Miller Diversified Corporation whereupon we operated in the commercial cattle feeding business until October 31, 2003 when the company sold substantially all of its assets and became a discontinued operation. On November 5, 2009, we acquired Smoke Anywhere USA, Inc., a distributor of electronic cigarettes, in a reverse triangular merger. As a result of the merger, Smoke Anywhere USA, Inc. became our sole operating business. On January 7, 2010, we changed our name to Vapor Corp. Our fiscal year is a calendar year ending December 31. Effective December 31, 2013, we reincorporated to the State of Delaware from the State of Nevada.

Our principal executive offices are located at 3001 Griffin Road, Dania Beach, Florida 33312, and our telephone number is (888) 766-5351. Our website is located at www.vapor-corp.com. Information on our website is not, and should not be considered, part of this joint proxy statement-prospectus.

About Vapor’s Business

We design, market, and distribute vaporizers, e-liquids, electronic cigarettes and accessories under the emagine vapor™, Krave®, Fifty-One® (also known as Smoke 51), VaporX®, Hookah Stix® and Alternacig® brands. We operate eight retail kiosks and one retail store under the emagine vapor™ name. We also design and develop private label brands for our distribution customers. Third party manufacturers manufacture our products to meet our design specifications. We market our products as alternatives to traditional tobacco cigarettes. In 2014, Vapor began to shift its primary focus from electronic cigarettes to vaporizers.

Vaporizers and Electronic Cigarettes

“Vaporizers” and “electronic cigarettes,” or “e-cigarettes,” are battery-powered products that enable users to inhale nicotine vapor without smoke, tar, ash, or carbon monoxide. Electronic cigarettes look like traditional cigarettes and, regardless of their construction are comprised of three functional components:

•

a mouthpiece, which is a small plastic cartridge that contains a liquid nicotine solution;

​

•

the heating element that vaporizes the liquid nicotine so that it can be inhaled; and

​

•

the electronics, which include: a lithium-ion battery, an airflow sensor, a microchip controller and an LED, which illuminates to indicate use.

​

When a user draws air through the electronic cigarette and/or vaporizer, the air flow is detected by a sensor, which activates a heating element that vaporizes the solution stored in the mouthpiece/cartridge, the solution is then vaporized and it is this vapor that is inhaled by the user. The cartridge contains either a nicotine solution or a nicotine free solution, either of which may be flavored.

Our Vaporizers and Electronic Cigarettes

Vaporizers feature a tank or chamber, a heating element and a battery. The vaporizer user fills the tank with e-liquid or the chamber with dry herb or leaf. The vaporizer battery can be recharged and the tank and chamber can be refilled.

We also offer disposable electronic cigarettes in multiple sizes, puff counts, styles, flavors and nicotine strengths; rechargeable electronic cigarettes that use replaceable cartridges (also known as “atomizers or cartomizers”); and rechargeable vaporizers for use with either electronic cigarette solution (“e-liquid”) or dry herbs or leaf. Disposable electronic cigarettes feature a one-piece construction that houses all the components and is utilized until the nicotine or nicotine free solution is depleted. Rechargeable electronic cigarettes feature a rechargeable battery and replaceable cartridge (also known as an “atomizer or cartomizer”). The atomizers or cartomizers are changed when the solution is depleted from use.

31

Our Brands

We sell our electronic cigarettes, vaporizers and e-liquids under several different brands, including emagine vapor™, Krave®, Fifty-One® (also known as Smoke 51), VaporX®, Stix® and Alternacig® brands. We also design and develop private label brands for our distribution customers. Our in-house engineering and graphic design teams work to provide aesthetically pleasing, technologically advanced affordable e-cigarette options. We are in the process of preparing to commercialize additional brands which we intend to market to new customers and demographics.

Recent Developments

On November 14, 2014, Vapor entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors providing for the sale of  $1,250,000 in aggregate principal amount of Vapor’s Convertible Notes Due November 14, 2015 (the “Notes”). The Notes were issued and sold through an exempt private securities offering to certain accredited investors, some of which are also investors in Vaporin. The Notes accrue interest on the outstanding principal at an annual rate of 7%. The principal and accrued interest on the Notes is due and payable on November 14, 2015, the maturity date of the Notes.

Vapor also issued warrants (the “Warrants”, and collectively with the Purchase Agreement, Notes, and the other documents, agreements and instruments referred to therein, the “Transaction Documents”) to the Note purchasers to acquire an aggregate of 1,136,364 shares of Vapor common stock with an exercise price of  $2.00 per share.

The Purchase Agreement

Under the terms of the Purchase Agreement, in connection with the sale of the Notes and Warrants, Vapor made certain representations and warranties to the Note purchasers concerning Vapor and its operations, including but not limited to the following:

•

Vapor’s subsidiaries;

​

•

Organization and qualifications to do business;

​

•

Authorization and enforcement of the Transaction Documents;

​

•

The absence of conflicts with organizational documents or other material agreements;

​

•

The valid issuance of securities;

​

•

Vapor’s capitalization;

​

•

Compliance with requirements to file certain reports and other information with the SEC;

​

•

The absence of  (i) certain events that could have a material adverse effect on Vapor and (ii) material undisclosed liabilities, events or developments;

​

•

Litigation or similar proceedings to which Vapor or its affiliates are involved;

​

•

Labor relations with Vapor’s employees;

​

•

Vapor’s compliance with applicable laws rules and regulations, including but not limited to the Sarbanes-Oxley Act of 2002, the Food, Drug and Cosmetics Act, the Foreign Corrupt Practice Act, Regulation M, the Currency and Transactions Reporting Act or 1970, the Securities Act of 1933, the Securities Exchange Act of 1934, and the Nasdaq Continued Listing Requirements, each as amended;

​

•

Title to Vapor’s assets and property; and

​

•

Vapor’s intellectual property.

​

32

In addition, the Purchase Agreement requires Vapor to comply with certain covenants and negative covenants, including but not limited to the following:

•

Vapor must indemnify, defend and hold harmless, the purchasers of the Notes for all losses as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by Vapor in the Purchase Agreement or other Transaction Documents and (b) any action instituted against a Note purchaser or any affiliate thereof by any other stockholder of Vapor with respect to any of the transactions contemplated by the Transaction Documents.

​

•

Vapor agreed not to enter into any “Equity Line of Credit” (as defined in the Purchase Agreement) or issue or agree to issue any common stock at a per share price less than the then-in-effect conversion price, nor issue nor agree to issue any securities convertible into, or exercisable or exchangeable for, common stock with a floating or Variable Priced Equity Linked Instruments (as defined in Section 4.13 of the Purchase Agreement) nor any of the foregoing or equity with price reset rights nor any of the foregoing or equity with price reset rights.

​

•

Vapor agreed to make certain payments to holders of the Notes, Warrants and any securities underlying such Notes and Warrants in the event Vapor fails to satisfy the current information requirements under Rule 144(c) of Regulation D, fails to maintain the listing of its common stock on Nasdaq, or fails to timely issue new certificates to such holders representing common stock without restrictive legends in the event such legends are no longer required.

​

•

For a period of one year, Vapor may not undertake a reverse or forward stock split or reclassification of its common stock without 10 days’ prior note to the Note purchasers (except in connection with the listing of the common stock on a national securities exchange).

​

Vapor has agreed to provide “piggy-back” registration rights in respect of the common stock underlying the Notes and the Warrants.

Vapor agreed to reimburse the Note purchasers for all costs and expenses, including reasonable attorneys’ fees and travel expenses, if any Note purchasers or any affiliates thereof, are party to any litigation or similar proceeding instituted by a stockholder of Vapor solely as a result of such purchaser’s acquisition of the Notes and Warrants pursuant to the Purchase Agreement.

The Notes

The Notes accrue interest at a rate of 7% per annum. The principal and accrued interest on the Notes is due and payable on November 14, 2015, the maturity date of the Notes. The Notes are convertible into shares of Vapor common stock at any time, in whole or in part, at the option of the holder thereof at a conversion price of  $1.10 per share (the “Conversion Price”). The Conversion Price is subject to adjustment upon the occurrence of certain events, including but not limited to stock dividends, stock splits, subsequent rights offerings of Vapor, pro rata distributions of Vapor’s assets, and in connection with a “Fundamental Transaction” (as such term is defined in the Transaction Documents, which includes, without limitation, mergers, consolidations, a sale of all or substantially all of the assets of Vapor, transactions effecting a change in control of Vapor and other similar transactions).

Upon the occurrence of an “Event of Default” or Vapor’s entry into a Fundamental Transaction or change of control transaction, the outstanding principal amount of the Notes and any amounts owing in respect thereof shall become, at the election of the holders of the Notes, immediately due and payable in cash in the amount of the “Mandatory Default Amount” and interest will accrue on such Mandatory Default Amount thereafter at a rate equal to the lesser of  (i) 15% or (ii) the maximum rate permitted under applicable law. The term “Mandatory Default Amount” means the sum of  (a) the greater of  (i) the outstanding principal amount of the Notes divided by the Conversion Price on the date the Mandatory Default Amount is either (A) demanded (if demand or notice is required to create an Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion Price, multiplied by the volume-weighted-average price (“VWAP”) of Vapor’s common stock (as determined in accordance with the terms of the Notes) on the date the Mandatory Default Amount is either (x) demanded or otherwise due or

33

(y) paid in full, whichever has a higher VWAP, or (ii) 115% of the outstanding principal amount of the Notes and (b) all other amounts, costs, expenses and liquidated damages due in respect of the Notes. The term “Event of Default” means the occurrence of certain events, including but not limited to the following:

•

Any default in payment under the Notes.

​

•

Failure of Vapor to comply with or perform any other covenants contained in the Notes.

​

•

A default or event of default under any of the related Transaction Documents, or any other material agreement of Vapor or any of its subsidiaries.

​

•

Any breach by Vapor of any representation or warranty in the Note or any of the Transaction Documents.

​

•

Vapor or any subsidiary commences or becomes subject to a proceeding under any bankruptcy or similar law, makes an assignment for the benefit of creditors or is adjudged insolvent or bankrupt.

​

•

Vapor becomes party to any change in control transaction, a Fundamental Transaction or agrees to dispose of all or in excess of 30% of its assets in one or more related transactions.

​

The terms of the Notes provide that Vapor may prepay the outstanding principal amount of the Notes, in whole or in part, by paying to the holders thereof an amount in cash equal to 115% of the principal amount to be redeemed, together with accrued but unpaid interest thereon and any and all other sums due, accrued or payable to such holders through the date of such redemption payment.

While the Notes or any portion thereof remains outstanding, Vapor may not, without the consent of the holders of a majority of the principal amount of the indebtedness under the Notes, engage in certain activities, including but not limited to the following:

•

Incur or guarantee indebtedness for borrowed money.

​

•

Create or cause to exist liens on any of Vapor’s property, other than certain permitted liens.

​

•

Amend its certificate of incorporation or bylaws in a manner adverse to the right of the holders of the Notes.

​

•

Repay or repurchase shares of its common stock or securities convertible into common stock except as may be permitted under the Notes or the related transaction documents.

​

•

Redeem, repurchase, repay or make any payments in respect of and indebtedness of Vapor other than in accordance with the terms of indebtedness held by Entrepreneurial Growth Company, LLC.

​

•

Pay cash dividends or distributions on any equity securities of Vapor.

​

•

Enter into any transaction with any affiliate of Vapor that would be required to be disclosed in any public filing with the SEC unless such transaction is made on an arms-length basis and expressly approved by a majority of the disinterested directors of Vapor.

​

The Warrants

In connection with the sale and issuance of the Notes, Vapor also issued to the Note purchasers, Warrants to acquire an aggregate of 1,136,364 shares of its common stock. The Warrants are exercisable after 180 days from the date of issuance, or May 14, 2015, until the fifth anniversary of such date of issuance at an exercise price of  $2.00 per share (subject to certain adjustments upon the occurrence of certain events, including but not limited to stock dividends, stock splits, subsequent rights offerings of Vapor, pro rata distributions of Vapor’s assets, and in connection with a Fundamental Transactions.

The foregoing summaries of the Purchase Agreement, Notes, and Warrants are not complete and are qualified in their entirety by reference to the full text of each such document, which are filed as Exhibit 10.1, 10.2, and 10.3, respectively, to Vapor’s Current Report on Form 8-K and which are incorporated into and made a part of this joint proxy statement-prospectus by reference.

34

Joint Venture with Vaporin

On December 17, 2014, Vapor and Vaporin agreed to enter into the Joint Venture through Emagine the Vape Store, LLC, a Delaware limited liability company (“Emagine”) of which Vapor and Vaporin are 50% members. The Operating Agreement provides that Emagine is a manager-managed limited liability company and Vaporin will serve as the initial manager of Emagine and will manage the day-to-day operations of Emagine, subject to certain customary limitations on managerial actions that require the unanimous consent of Vapor and Vaporin, including but not limited to making or guaranteeing loans, distributing cash or other property to the members of Emagine, entering into affiliate transactions, amending or modifying limited liability company organizational documents, and redeeming or repurchasing membership interests from any of the members.

The purpose of the Joint Venture is to obtain and build-out retail stores for the sale of Vapor’s and Vaporin’s products under the “Emagine Vapor” name or other brands of the respective parties. The parties plan to finance the retail stores through third party loan financing secured by a blanket lien on the assets of Emagine. Emagine has entered into a Secured Line of Credit Agreement, pursuant to which certain third parties have agreed to provide debt financing of up to $3 million to Emagine to finance the Joint Venture. As of the date of joint proxy statement-prospectus, Emagine has received $1 million in debt financing under the Secured Line of Credit Agreement. Neither Vapor nor Vaporin is a guarantor under the Secured Line of Credit Agreement or any of the Secured Notes issued thereunder.

Additional Information About Vapor

This joint proxy statement-prospectus is being delivered together with a copy of  (i) Vapor’s latest annual report on Form 10-K for the fiscal year ended December 31, 2013 and (ii) Vapor’s latest quarterly report on Form 10-Q for the quarter ended September 30, 2014. Important information about Vapor and its operations are contained in these enclosed reports and stockholders should carefully review the information contained in these reports before deciding how to vote on the proposals described in this joint proxy statement-prospectus.

35

CERTAIN INFORMATION ABOUT VAPORIN

General

Vaporin (formerly Valor Gold Corp. and Felafel Corp.) was incorporated under the laws of the State of Delaware on June 2, 2009 for the purpose of establishing and operating a falafel restaurant in Riga, Latvia.

In May 2012, Vaporin entered into an Agreement and Plan of Merger with Pershing Gold Corporation (“Pershing”). As a result of the agreement, Vaporin acquired certain business and operations of Pershing primarily consisting of junior gold exploration mining claims and related rights. Vaporin discontinued its prior business and operations and revised its business purpose to be an exploration stage gold and minerals exploration company focused on searching for gold and other mineral resources and seeking out potentially significant exploration and development targets. In July 2013, Vaporin discontinued its exploration stage gold and minerals business.

In January 2014, Vaporin entered into a share exchange agreement with Vaporin Florida, Inc. a privately held Florida corporation (“Vaporin Florida”). Upon closing of the share exchange, the holders of Vaporin Florida’s outstanding common stock transferred all of the issued and outstanding common stock of Vaporin Florida to Vaporin in exchange for 35 million shares (not giving effect to the one-for-50 reverse stock split that occurred on September 10, 2014) of Vaporin’s common stock. As a result of the share exchange, Vaporin Florida became a wholly owned subsidiary of Vaporin. Immediately following the closing of the share exchange, Vaporin changed its business plan and operations to that of Vaporin Florida.

Effective August 29, 2014, Vaporin acquired The Vape Store, Inc. (the “Vape Store”) which operated four retail stores in Florida. As a result of the acquisition, The Vape Store, Inc. became a wholly owned subsidiary of Vaporin. This subsidiary now operates five retail stores and is in the process of opening four additional stores.

About Vaporin’s Business

Vaporin Florida was formed as a limited liability company in the State of Florida on December 10, 2012 and was converted into a corporation on December 27, 2013. Vaporin Florida created the “Vaporin Electronic Cigarette”, an electronic smoking device, as an alternative to tobacco-based cigarettes, that utilizes micro-electronic technology to provide users with a smoking experience without the tobacco and tar found in traditional cigarettes. In response to consumer demands and competition from major tobacco companies, Vaporin has transitioned from a seller of e-cigarettes to a seller of vaporizers and e-liquids used in vaporizers. As discussed below, vaporizers have subsequently replaced e-cigarettes as Vaporin’s primary source of revenues. Unless the context indicates otherwise, when Vaporin refers to e-cigarettes, it is referring to both e-cigarettes and vaporizers.

Effective August 29, 2014, Vaporin, Vaporin Acquisitions, Inc., a Florida corporation and wholly owned subsidiary of Vaporin, the Vape Store, and Steve and Christy Cantrell, holders of all outstanding Vape Store shares, entered into and closed an Agreement and Plan of Merger (the “Vape Store Merger Agreement”). Pursuant to the Vape Store Merger Agreement, Vape Store merged with and into Vaporin Acquisitions, Inc., with Vaporin Acquisitions, Inc. continuing as the surviving corporation and Vaporin’s wholly owned subsidiary.

The Vape Stores

As a result of the merger with Vape Store, Vaporin acquired four wholly owned brick and mortar stores located in Cape Coral, Florida and subsequently acquired an additional location in Fort Myers, Florida. Vaporin also expects to acquire up to five additional stores located in or around Orlando, Florida in the first quarter of 2015 through its subsidiary Emagine the Vape Stores, LLC, a Delaware limited liability company of which Vaporin and Vapor each presently own 50%. There can be no assurance that Vaporin will close on the acquisition of such additional stores.

36

Online Sales

Vaporin generates a substantial portion of its revenue from online sales through Vaporin’s website, www.vaporin.com. Information included on www.vaporin.com is not incorporated by reference in this proxy statement-prospectus. Vaporin recently opened a call support center at its Miami headquarters to offer online sales support.

Other Commercial Sales

In addition to sales made through Vaporin’s wholly owned brick and mortar stores, Vaporin supplies products to non-affiliated third party retail establishments for resale. See “Marketing and Distribution” below.

Vaporizers

The largest proportion of Vaporin revenues comes from the sale of vaporizer products, including the Vaporin Pen, a product which has an innovative design and provides benefits over the “traditional” e-cigarette. The Vaporin Pens are designed to be an efficient, reliable and consistent nicotine and/or flavor delivery system. While they look less like a cigarette, they offer more practicality due to their design. Vaporin Pens offer a longer battery life and a much larger range of e-liquid choices for taste and flavor than electronic cigarettes which come prepackaged with cartridges. Vaporin Pens can also be a lot more discreet because the scent they produce is mild, their size in most cases is significantly smaller and they do not produce a notable amount of second-hand vapor.

E-Liquids

Vaporin’s proprietary e-liquid formula is made to offer the desired traditional smoking experience for the enjoyment of the consumer. Consumers can manually fill or refill Vaporin blank cartridges. The e-liquid, which produces the vapor when heated, is a solution consisting of United States Pharmacopeia (“USP”) Grade vegetable glycerin and USP Grade propylene glycol mixed with nicotine and different flavorings. The U.S. Food and Drug Administration (the “FDA”) has classified the vapor as a caloric macronutrient in the sugar alcohol category. Consumers are offered wide range of e-liquid flavors including tobacco, classic tobacco, menthol, cherry, vanilla, chocolate, coffee, strawberry, green apple, piña colada and peach.

Electronic Cigarettes

A small proportion of Vaporin revenues come from “electronic cigarettes” or “e-cigarettes,” battery-powered products that enable users to inhale nicotine vapor without smoke, tar, ash, or carbon monoxide. Electronic cigarettes look like traditional cigarettes and, regardless of their construction are comprised of three functional components: a mouthpiece, which is a small plastic cartridge that contains a liquid nicotine solution; the heating element that vaporizes the liquid nicotine so that it can be inhaled; and the electronics, which include: a lithium-ion battery, an airflow sensor, a microchip controller and an LED, which illuminates to indicate use.

When a user draws air through the electronic cigarette, the air flow is detected by a sensor, which activates a heating element that vaporizes the solution stored in the mouthpiece/cartridge. The solution is then vaporized and it is this vapor that is inhaled by the user. The cartridge contains either a nicotine solution or a nicotine free solution, either of which may be flavored.

Kits and Accessories

Vaporin’s electronic cigarettes are available in kits that contain everything a user needs to begin enjoying their “vaping” experience. In addition to kits Vaporin sells replacement parts including batteries, refill cartridges or cartomizers that contain the liquid solution, atomizers, tanks and e-liquids. Our refill cartridges and e-liquids are available in various assorted flavors and nicotine levels (including cartridges without nicotine). In addition to Vaporin’s electronic cigarette and vaporizer products Vaporin sells an assortment of accessories, including various types of chargers.

37

Competition

Competition in the electronic cigarette industry, including the vaporizer and e-liquid segments, is intense. Vaporin competes with other sellers of electronic cigarettes including “big tobacco” companies and larger e-cigarette companies like V2Cigs, NJOY and Blu (owned by a “big tobacco” company), which, depending on local regulation, sell their products in big box stores like Costco. The nature of Vaporin’s competitors is varied as the market is highly fragmented and the barriers to entry into the business are low. Vaporin’s direct competitors sell products that are substantially similar to Vaporin’s and through the same channels through which Vaporin sells its products. Vaporin competes with these direct competitors for sales through distributors, wholesalers and retailers, including but not limited to national chain stores, tobacco shops, gas stations, travel stores, shopping mall kiosks, in addition to direct to public sales through the Internet, mail order and telesales.

As a general matter, Vaporin has access to and markets and sells similar vaporizers and electronic cigarettes as Vaporin’s competitors and Vaporin sells its products at substantially similar prices as its competitors. Accordingly, the key competitive factors for Vaporin’s success is the quality of service Vaporin offers customers, the scope and effectiveness of Vaporin’s marketing efforts, including media advertising campaigns and, increasingly, the ability to identify and develop new sources of customers.

Part of Vaporin’s business strategy focuses on the establishment of contractual relationships with distributors. Vaporin competitors in the industry are also seeking to enter into such contractual relationships. In many cases, competitors for such contracts may have greater management, human, and financial resources for entering into such contracts and for attracting distributor relationships. Furthermore, certain of Vaporin’s competitors may have better control of their supply and distribution and be better established, larger and better financed.

Vaporin competes with faces competition from “big tobacco” companies in two ways. First, cigarette smoking, despite all of its dangers, is a significantly larger market. Second, “big tobacco” is beginning to enter the e-cigarette market. “Big tobacco” companies have extensively more marketing and financial resources, global distribution networks in place and a customer base that is loyal to their brands.

Marketing and Distribution

Vaporin markets its products as an alternative to traditional tobacco cigarettes. Vaporin is a distributor and marketer of vaporizers and e-liquids products. Vaporin offers e-liquids in multiple nicotine strengths, non-nicotine and a variety of flavors. Vaporin’s innovative technology offers the look, feel and taste of traditional cigarettes without any tar, tobacco, smoke and odor. Vaporin products are offered in a variety of kits ranging from those for beginner vapor users up to high-level experienced users. The unique Vaping Pens product line and Made-In-USA E-Liquid is what makes Vaporin one of the emerging brands in the market.

Vaporin focuses on a multi-pronged revenue model comprised of distributor sales, online retail continuity programs and the acquisition and opening of brick and mortar retail stores.

An important part of Vaporin’s business strategy focuses on the establishment and maintenance of distribution relationships. Vaporin currently distributes products through major convenience store distributors that include Harold Levinson Associates and Sledd Co. A significant portion of Vaporin’s revenue to date has come from sales directly to distributors.

Vaporin also sells products directly to consumers on Vaporin’s website, www.vaporin.com. The information and content on our website is not incorporated in this proxy statement-prospectus. In March 2014, Vaporin launched an affiliate marketing program that offers consumers a free trial of Vaporin products. If the consumer does not cancel the trial offer, they will be billed the consumer automatically each month until the consumer cancels the monthly shipment of additional products.

Vaporin sells directly to consumers through five company owned retail vape stores. Vaporin acquired four of these retail vape stores in August 2014 and then opened a fifth store in November 2014. Vaporin anticipates a significant portion of future revenue will come from the retail stores.

On December 17, 2014, Vaporin entered into a joint venture with Vapor as 50% members of Emagine. For a summary of the joint venture see the section captioned “Joint Venture with Vaporin” on page 35.

38

Suppliers

In March 2014, Vaporin entered into an exclusive supply agreement with ChromaDex Corporation for NIAGEN™, a nicotinamide riboside ingredient, as well as PURENERGY™, a caffeine alternative ingredient. Mr. Michael Brauser, father of Vaporin’s Chief Operating Officers, and a consultant to and 5% stockholder of Vaporin and Mr. Barry Honig, a 5% stockholder of Vaporin are Co-Chairmen of the Board of Chromadex.

Vaporin previously purchased products from Direct Source, an entity controlled by Gregory Brauser, Vaporin’s Chief Operating Officer. Direct Source purchased the products directly from the manufacturers in China and allowed Vaporin to develop direct relations with manufacturers in China. Direct Source charged Vaporin an 8% administrative premium. As of September 30, 2014, Direct Source is no longer a material supplier and Vaporin sources its hardware from multiple non-affiliated manufacturers located in China without paying any fees to Direct Source.

Since merging with the Vape Store, Vaporin has transitioned to manufacturing all of its e-liquids internally. Vaporin believes that an adequate supply of product and raw materials will be available to us as needed and from multiple sources and suppliers.

Intellectual Property

Vaporin’s intellectual property is primarily comprised of trade secrets and technological innovation. Vaporin owns the registered trademark “Vaporin”.

Employees

As of December 23, 2014, Vaporin had 40 full-time and no part-time employees. None of Vaporin’s employees are subject to a collective bargaining agreement.

Government Regulation

Since a 2010 U.S. Court of Appeals decision, the FDA is permitted to regulate electronic cigarettes as “tobacco products” under the Family Smoking Prevention and Tobacco Control Act of 2009 (the “Tobacco Control Act”). Under this decision, the FDA is not permitted to regulate electronic cigarettes as “drugs” or “devices” or a “combination product” under the Federal Food, Drug and Cosmetic Act unless they are marketed for therapeutic purposes. This is contrary to anti-smoking devices like nicotine patches, which undergo more extensive FDA regulation. Because Vaporin does not market Vaporin’s electronic cigarettes for therapeutic purposes, Vaporin’s electronic cigarettes are subject to being classified as “tobacco products” under the Tobacco Control Act. The Tobacco Control Act grants the FDA broad authority over the manufacture, sale, marketing and packaging of tobacco products, although the FDA is prohibited from issuing regulations banning all cigarettes or all smokeless tobacco products, or requiring the reduction of nicotine yields of a tobacco product to zero.

On April 24, 2014, the FDA released proposed rules that would extend its regulatory authority to electronic cigarettes and certain other tobacco products under the Tobacco Control Act. The proposed rules would require that electronic cigarette manufacturers (i) register with the FDA and report electronic cigarette product and ingredient listings; (ii) market new electronic cigarette products only after FDA review; (iii) only make direct and implied claims of reduced risk if the FDA confirms that scientific evidence supports the claim and that marketing the electronic cigarette product will benefit public health as a whole; (iv) not distribute free samples; (v) implement minimum age and identification restrictions to prevent sales to individuals under age 18; (vi) include a health warning; and (vii) not sell electronic cigarettes in vending machines, unless in a facility that never admits youth. The proposed regulation is subject to a 75-day public comment period, following which the FDA will finalize the proposed regulation. It is not known how long this regulatory process to finalize and implement the rules may take. Accordingly, Vaporin cannot predict the content of any final rules from the proposed rules or the impact they may have.

In this regard, total compliance and related costs are not possible to predict and depend substantially on the future requirements imposed by the FDA under the Tobacco Control Act. Costs, however, could be substantial and could have a material adverse effect on Vaporin’s business, results of operations and

39

financial condition. In addition, failure to comply with the Tobacco Control Act and with FDA regulatory requirements could result in significant financial penalties and could have a material adverse effect on Vaporin’s business, financial condition and results of operations and ability to market and sell Vaporin’s products. At present, it is difficult to predict whether the Tobacco Control Act will impact Vaporin to a greater degree than competitors in the industry, thus affecting Vaporin’s competitive position.

State and local governments currently legislate and regulate tobacco products, including what is considered a tobacco product, how tobacco taxes are calculated and collected, to whom and by whom tobacco products can be sold and where tobacco products may or may not be smoked. State and local regulation of the e-cigarette market and the usage of e-cigarettes is beginning to accelerate.

As local regulations expand, electronic cigarettes may lose their appeal as an alternative to cigarettes, which may have the effect of reducing the demand for Vaporin’s products and as a result have a material adverse effect on Vaporin’s business, results of operations and financial condition.

At present, neither the Prevent All Cigarette Trafficking Act (which prohibits the use of the U.S. Postal Service to mail most tobacco products, which would require individuals and businesses that make interstate sales of cigarettes or smokeless tobacco to comply with state tax laws) nor the Federal Cigarette Labeling and Advertising Act (which governs how cigarettes can be advertised and marketed) apply to electronic cigarettes. The application of either or both of these federal laws to electronic cigarettes would have a material adverse effect on Vaporin’s business, results of operations and financial condition.

Vaporin expects that the tobacco industry will experience significant regulatory developments over the next few years, driven principally by the World Health Organization’s Framework Convention on Tobacco Control (“FCTC”). The FCTC is the first international public health treaty on tobacco, and its objective is to establish a global agenda for tobacco regulation with the purpose of reducing initiation of tobacco use and encouraging cessation. Regulatory initiatives that have been proposed, introduced or enacted include:

•

the levying of substantial and increasing tax and duty charges;

​

•

restrictions or bans on advertising, marketing and sponsorship;

​

•

the display of larger health warnings, graphic health warnings and other labeling requirements;

​

•

restrictions on packaging design, including the use of colors and generic packaging;

​

•

restrictions or bans on the display of tobacco product packaging at the point of sale, and restrictions or bans on cigarette vending machines;

​

•

requirements regarding testing, disclosure and performance standards for tar, nicotine, carbon monoxide and other smoke constituents levels;

​

•

requirements regarding testing, disclosure and use of tobacco product ingredients;

​

•

increased restrictions on smoking in public and work places and, in some instances, in private places and outdoors;

​

•

elimination of duty free allowances for travelers; and

​

•

encouraging litigation against tobacco companies.

​

If electronic cigarettes, including vaporizers and e-liquids, are subject to one or more significant regulatory initiates enacted under the FCTC, Vaporin’s business, results of operations and financial condition could be materially and adversely affected.

40

VAPORIN’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Results of operations of Vaporin for three and nine months ended September 30, 2014 and 2013.

Revenue

Total revenue for the three and nine months ended September 30, 2014 was approximately $837,000 and $1,439,000, respectively, and for both the three and nine months ended September 30, 2013 was approximately $28,000. The approximately $809,000 and $1,411,000 increase was primarily reflective of purchasing inventory, establishing our sales effort and approximately $200,000 in sales from our acquisition of the Vape Store. Vaporin’s focus has been on gaining market share through product distribution, retail stores, direct sales and website sales of our products. Vaporin’s Internet business is growing. In promotion of this, in July 2014, Vaporin hired a Vice President of Internet Marketing and expect that aspect of our business to further grow. Additionally, Vaporin hired a Vice President to manage the Vape Store.

Operating expense

Total operating expenses for the three and nine months ended September 30, 2014 were approximately $1,799,000 and $4,286,000, respectively, and total operating expenses for the three and nine months ended September 30, 2013 were approximately $36,000 and $149,000, respectively.

The approximate $1,763,000 and $4,137,000 increase in operating expenses for the three and nine months ended September 30, 2014 compared to the three and nine months ended September 30, 2013, respectively, is primarily attributable to an increases in stock based compensation, advertising and promotion expense, consulting fees, payroll and professional fees as a result of continued growth and development of Vaporin’s sales and general business activity. Non cash stock based compensation for employees and consultants for the three and nine months ended September 30, 2014 was approximately $659,000 and $1,585,000, respectively. Advertising and promotion expense for the three and nine months ended September 30, 2014 was approximately $202,000 and $649,000, respectively.

Loss from operations

We reported an operating loss from continuing operations of approximately $1,386,000 and $3,625,000 for the three and nine months ended September 30, 2014, respectively, and $48,000 and $161,000 for the three and nine months ended September 30, 2013, respectively. The increase in operating loss was primarily due to continued growth, market penetration and development of operations. Non cash stock based compensation was approximately 47.5% and 43.7% respectively, of our loss from operations for the three and nine months ended September 30, 2014.

Other Income (Expenses)

Total other income (expense) was approximately $28,000 and ($312,000) for the three and nine months ended September 30, 2014, respectively, and $0 for the three and nine months ended September 30, 2013, respectively.

The change in other income (expense) for the three months ended September 30, 2014 compared to September 30, 2013 is primarily attributable to an increase of approximately $53,000 of interest expense in connection with the amortization of debt discount and the additional warrants granted related to the 10% convertible note payable, and offset by an increase in income from the change in fair value of derivative liabilities of approximately $81,000. There was no derivative expense for the three months ended September 30, 2014 and 2013.

The change in other income (expense) for the nine months ended September 30, 2014 compared to September 30, 2013 is primarily attributable to an increase of approximately $398,000 of interest expense in connection with the amortization of debt discount and the additional warrants granted related to the 10% convertible note payable, derivative expense of  $86,000 and was offset by an increase in income from the change in fair value of derivative liabilities of approximately $173,000.

41

Net Loss

As a result of the operating expense and other expense discussed above, Vaporin reported a net loss of approximately $1.4 million and $48,000 for the three months ended September 30, 2014 and 2013, respectively, and $3.9 million and $161,000 for the nine months ended September 30, 2014 and 2013, respectively.

Results of operations of Vaporin for years ended December 31, 2013 and 2012.

Because Vaporin closed the share exchange (which is described on page 36 herein) in January 2014, the discussion below concerning our results of operations is derived from the consolidated financial statements reflecting our former business.

Operating Expenses

Total operating expenses for the year ended December 31, 2013 as compared to the year ended December 31, 2012, were approximately $3.1 million and $4.5 million, respectively. The approximately $1.4 million decrease in operating expenses for the years ended December 31, 2013 is primarily attributable to a decrease in approximately $1.1 million of compensation expense related primarily to non-cash stock based compensation expense, a decrease of approximately $0.3 million in consulting fees related primarily to a decrease in investor relation expenses, a decrease of approximately $73,000 of professional fees primarily related to decrease legal services and a decrease of approximately $24,000 in general and administrative expenses primarily for rent, insurance and office expenses due to cost cutting measures.

Operating Loss from Continuing Operations

Vaporin reported an operating loss from continuing operations of approximately $3.1 million and $4.5 million for the years ended December 31, 2013 and 2012, respectively. The decrease in operating loss was due to the decreases in operating expenses described above.

Other Income (Expenses)

Total other income (expense) was approximately $0.5 million and ($12,000) for the years ended December 31, 2013 and 2012, respectively. The change in other income (expense) of approximately $0.5 million is primarily attributable to (i) an increase of approximately $0.7 million from the forgiveness of accrued expenses due to the termination of a certain consulting agreement, (ii) an increase in gain from the change in fair value of derivative liabilities of approximately $0.2 million, offset by (iii) an increase of approximately $90,000 interest expense in connection with the issuance of convertible notes payable and, (iv) an increase of  $0.3 million of derivative expense.

Loss from Discontinued Operations

The following table sets forth for years ended December 31, 2013 and 2012 indicated selected financial data of Vaporin’s discontinued operations of its exploration stage gold and minerals business.

42

Net Loss

As a result of the operating expense and other expense discussed above, Vaporin reported a net loss of approximately $3.1 million and $8.3 million for the years ended December 31, 2013 and 2012, respectively. Vaporin reported a net loss of approximately $12.6 million for the period from April 28, 2011 (Inception) to December 31, 2013.

Liquidity and Capital Resources

Cash Flows from Operating Activities

For the nine months ended September 30, 2014, Vaporin used approximately $2,815,000 of cash in operating activities. This is an increase of approximately $2,300,000 on cash used in operations from approximately $515,000 of cash provided from operating activities during the nine months ended September 30, 2013. The cash use was primarily related to establishing operations by purchasing initial inventory, advertising and promotion, payroll and consulting. In 2013, Vaporin used approximately $1,000,000 of cash in operating activities during 2013, a decrease from approximately $2.6 million of cash used in operating activities during 2012. Vaporin net loss of approximately $3.1 million was mainly offset by approximately $1.0 million of stock-based compensation and $1.0 million in amortization of prepaid expenses in connection with the issuance of stock for prepaid services.

Cash Flows from Investing Activities

For the nine months ended September 30, 2014, Vaporin had approximately $798,000 provided by financing activities as a result of the acquisition of the Vape Store. In 2013, Vaporin lent $50,000 to a third party compared to $2,000,000 in 2012 for cash paid in connection with the recapitalization of Vaporin.

Cash Flows from Financing Activities

For the nine months ended September 30, 2014, Vaporin had approximately $4,357,000 provided by financing activities as a result of proceeds from the sale of common and preferred stock and from the issuance of debt prior to recapitalization. In 2013, we had $250,000 provided by financing activities from the sale of 10% secured convertible promissory notes compared to $5 million in 2012 which primarily consisted of proceeds from the sale of common and preferred stock.

Liquidity

As of January 10, 2015, Vaporin had approximately $100,000 in available cash. Vaporin does not have sufficient cash to meet it forecasted working capital needs for the next 12 months. Vaporin is currently seeking to raise $1.0 million from the sale of one-year convertible notes. See Proposal 3 of the Vapor Special Meeting at page 111. No such additional financing may be available on acceptable terms, if at all. Vaporin’s ability to sell additional shares of its stock and/or borrow cash could be materially adversely affected by the current climate in the global equity and credit market, particularly for microcap companies like Vaporin. The plans and actions proposed by management may not be successful and may not generate profitability and positive cash flows in the future. Additionally, the sales of equity or convertible debt securities may result in dilution to Vaporin’s stockholders.

The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should Vaporin be unable to continue as a going concern. The ability of Vaporin to continue as a going concern is dependent on management’s plans, which include further implementation of its business plan.

Recent Accounting Pronouncements

See Note 2 to Vaporin’s unaudited interim condensed consolidated financial statements regarding recent accounting pronouncements.

43

Legal Proceedings

Vaporin is not party to any material pending legal proceedings.

Description of Property

Vaporin’s principal offices are located at 4400 Biscayne Boulevard, Miami, Florida 33137 where Vaporin leases approximately 3,000 square feet of office space under a month to month lease.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On April 15, 2014, Vaporin notified KBL, LLP (the “Former Auditor”) of its dismissal, effective April 15, 2014, as Vaporin’s independent registered public accounting firm. The Former Auditor served as the auditors of Vaporin’s financial statements for the period from June 8, 2012 through April 15, 2014. The reports of the Former Auditor on Vaporin’s consolidated financial statements for Vaporin’s fiscal years ended December 31, 2013 and 2012 did not contain any adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principle, except that there was an explanatory paragraph describing conditions that raised substantial doubt about Vaporin’s ability to continue as a going concern. The decision to change accountants was approved by Vaporin’s Board of Directors. From June 8, 2012 through April 15, 2014, the period during which the Former Auditor was engaged as Vaporin’s independent registered public accounting firm, there were no disagreements with the Former Auditor on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the Former Auditor, would have caused the Former Auditor to make reference to the subject matter of the disagreements as defined in Item 304 of Regulation S-K in connection with any reports it would have issued, and there were no “reportable events” as such term is described in Item 304 of Regulation S-K. Vaporin provided the Former Auditor with a copy of the foregoing disclosure, and requested that the Former Auditor furnish Vaporin with a letter addressed to the SEC stating whether or not it agrees with such disclosure. On April 15, 2014, L.L. Bradford & Company, LLC (“L.L. Bradford”) was appointed to serve as Vaporin’s new independent registered public accounting firm, effective April 18, 2014. The engagement of L.L. Bradford as Vaporin’s new independent registered public accounting firm was approved by Vaporin’s Board of Directors. During Vaporin’s two most recent fiscal years and any subsequent interim period prior to L.L. Bradford’s engagement as Vaporin’s new independent registered public accounting firm, Vaporin did not consult with L.L. Bradford regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on Vaporin’s financial statements; or (ii) any matter that was either the subject of a disagreement as defined in Item 304 of Regulation S-K or a reportable event as such term is described in Item 304 of Regulation S-K.

Financings

Pre-Closing Vaporin Financing

Vaporin is currently seeking to raise $1.0 million from the sale of 12 month convertible notes (the “Pre-Closing Financing”). Assuming the merger closes, the notes will be assumed by Vapor Corp and shall be convertible at a price to be negotiated between investors and Vapor Corp. See Vapor’s Proposal 3 on page 111 for a further description of the Pre-Closing Financing.

Post-Closing Vapor Equity Financing Transaction

As a condition to the closing of the merger, $3.5 million in third party equity financing (the “Post-Closing Financing”) must be arranged to be funded immediately following the consummation of the merger. See Vapor’s Proposal 4 on page 112 for a further description of the Post-Closing Financing.

44

INFORMATION ABOUT THE VAPORIN MEETING

Date, Time and Place

This document solicits, on behalf of the Vaporin Board of Directors, proxies to be voted at a special meeting of Vaporin stockholders and at any adjournments or postponements thereof. The Vaporin meeting is scheduled for:

February 20, 2015, at 10:00 a.m. (local time)
4400 Biscayne Blvd.
Miami, FL 33137

Purpose

At the meeting, Vaporin stockholders will consider and vote on:

•

approval of the merger agreement;

​

•

approval of the Executive Compensation Proposal; and

​

•

approval of the Vaporin Adjournment Proposal.

​

Board Recommendations

The Vaporin Board of Directors unanimously recommends that stockholders vote FOR:

•

approval of the merger agreement;

​

•

approval of the Executive Compensation Proposal; and

​

•

approval of the Vaporin Adjournment Proposal.

​

Record Date; Quorum; Required Vote

As of the record date, January 12, 2015, 4,893,252 shares of common stock of Vaporin were issued and outstanding. As of the record date, Vaporin also had 100,000 shares of Series B preferred stock and 1,550 shares of Series C preferred stock issued and outstanding which were convertible into a total of 1,650,000 shares of Vaporin common stock. The presence at the Vaporin special meeting, in person or by proxy, of holders of a majority of the issued and outstanding shares of Vaporin common stock and Vaporin preferred stock (on an as-converted basis) as of the record date is considered a quorum for the transaction of business. If Vaporin stockholders submit a properly completed proxy or if they appear at the Vaporin special meeting to vote in person, their shares of common stock or preferred stock will be considered part of the quorum. Abstentions, but not broker non-votes, will be counted as present to determine if a quorum for the transaction of business is present. In the absence of a quorum, the Vaporin special meeting will be adjourned or postponed.

The merger cannot be completed without Vaporin stockholder approval of the merger agreement. The affirmative vote of a majority of the shares of Vaporin common stock and Vaporin preferred stock (on an as-converted basis) outstanding on the record date for the Vaporin special meeting is required to approve the merger agreement. In addition, because the merger agreement contemplates that each share of Vaporin preferred stock will be converted into Vaporin common stock immediately prior to the consummation of the merger, holders of a majority of each series of Vaporin preferred stock issued and outstanding must approve the merger agreement.

On the record date, the directors and executive officers of Vaporin as a group beneficially owned a total of approximately 1.4 million shares of Vaporin common stock, representing approximately 29% of the issued and outstanding shares. This does not count approximately 400,000 RSUs which are not considered outstanding or beneficially owned.

45

Approval of the Executive Compensation Proposal requires the affirmative vote of the holders of a majority of the shares of Vaporin common stock and preferred stock (on an as-converted basis) present or represented by proxy at the Vaporin special meeting and entitled to vote thereon. If you mark your proxy or voting instructions to abstain, it will have the effect of a vote against the compensation proposal. This proposal is advisory in nature and a vote to approve or disapprove will not be binding on Vaporin or the Vaporin Board of Directors.

Approval of the Vaporin Adjournment Proposal requires the affirmative vote of a majority of the shares of Vaporin common stock and preferred stock (on an as-converted basis) present or represented by proxy at the Vaporin special meeting and entitled to vote thereon.

The matters to be considered at the Vaporin special meeting are of great importance to the stockholders of Vaporin. Accordingly, you are urged to read and carefully consider the information presented in this joint proxy statement-prospectus, and to complete, date, sign and promptly return the enclosed proxy in the enclosed postage paid envelope as instructed on the proxy card or to vote by Internet or telephone.

Voting Rights; Proxies

If Vaporin stockholders properly execute a proxy card and send it to Vaporin in the enclosed envelope in a timely manner, their proxy will be voted in accordance with the instructions they indicate, unless they revoke their proxy prior to the vote. If Vaporin stockholders send Vaporin a proxy card that does not instruct Vaporin how to vote, their shares will be voted (1) “FOR” approval of the merger agreement and (2) “FOR” approval of the Executive Compensation Proposal, and (3) “FOR” approval of the Vaporin Adjournment Proposal. This may also affect the ability to exercise appraisal rights.

Vaporin stockholders may revoke their grant of a proxy at any time before it is voted by:

(i)

filing a written revocation of the proxy with the Secretary of Vaporin;

​

(ii)

executing a later Internet or telephone vote;

​

(iii)

submitting a signed proxy card bearing a later date; or

​

(iv)

attending and voting in person at the Vaporin special meeting.

​

Written revocations should be sent to Corporate Secretary, Secretary, Vaporin, Inc., 4400 Biscayne Blvd., Miami, Florida 33137. Attendance at the Vaporin special meeting will not in and of itself revoke a proxy, unless you choose to cast a ballot at such special meeting.

If Vaporin stockholders use the Internet, they can change their vote at the Internet address shown on their proxy card. The Internet voting system is available 24 hours a day until 11:59 p.m., Eastern Time, on February 19, 2015.

If Vaporin stockholders vote by telephone, they can change their vote by using the toll free telephone number shown on their proxy card. The telephone voting system is available 24 hours a day in the United States until 11:59 p.m., Eastern Time, on February 19, 2015.

The inspectors of election appointed for the Vaporin special meeting, who will determine whether or not a quorum is present, will tabulate votes cast by proxy or in person at such special meeting. Abstentions, but not “broker non-votes,” will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Abstentions occur when proxies are marked as abstentions, or when stockholders appear in person but abstain from voting. “Broker non-votes” occur when a broker indicates on a proxy that it does not have discretionary authority regarding certain shares. Abstentions are effectively a vote AGAINST the merger agreement and the other proposals at the Vaporin special meeting. Broker non-votes will have the effect of a vote AGAINST the merger agreement but will have no effect on any other proposals at the Vaporin special meeting.

If Vaporin stockholders do not vote by proxy, telephone or internet or in person at the Vaporin special meeting, it will have the effect of a vote AGAINST the merger agreement, the vote to approve the Executive Compensation Proposal and the Vaporin Adjournment Proposal. Failure to vote may also affect whether a quorum is present.

46

Solicitation of Proxies

Vaporin will bear all costs of soliciting proxies for the Vaporin special meeting. Vaporin may retain a third party proxy solicitation firm to assist in the solicitation of proxies. If a proxy solicitation firm is engaged by Vaporin, the cost of this engagement is not expected to exceed $10,000. In addition, the directors, officers and employees of Vaporin may solicit proxies for the Vaporin special meeting from Vaporin stockholders in person or by telephone. These directors, officers and employees will not be specifically compensated for their services. Vaporin will also make arrangements with brokerage firms and other custodians, nominees and fiduciaries to send proxy materials to their principals and will reimburse those parties for their expenses in doing so.

47

INFORMATION ABOUT THE VAPOR MEETING

Date, Time and Place

This document solicits, on behalf of the Vapor Board of Directors, proxies to be voted at a special meeting of Vapor stockholders and at any adjournments or postponements thereof. The Vapor meeting is scheduled for:

February 20, 2015, at 10:00 a.m. (local time)
Gunster, Yoakley & Stewart, P.A.
450 E. Las Olas Blvd.
Suite 1400
Fort Lauderdale, FL 33301

Purpose

At the meeting, Vapor stockholders will consider and vote on:

•

approval of the merger agreement and the issuance of common stock in connection with the merger;

​

•

approval of the proposal to ratify the previous issuance of convertible debt and common stock upon the conversion thereof in connection with the Bridge Financing;

​

•

approval of the Pre-Closing Financing Proposal;

​

•

approval of the Post-Closing Financing Proposal; and

​

•

approval of the Vapor Adjournment Proposal.

​

Board Recommendations

The Vapor Board of Directors recommends that stockholders vote FOR:

•

approval of the merger agreement and the issuance of common stock in connection with the merger;

​

•

approval of the proposal to ratify the previous issuance of convertible debt and common stock upon the conversion thereof in connection with the Bridge Financing;

​

•

​

•

approval of the Post-Closing Financing Proposal; and

​

•

approval of the Vapor Adjournment Proposal.

​

Record Date; Quorum; Required Vote

As of the record date, January 12, 2015, 16,611,911 shares of common stock of Vapor were issued and outstanding. The common stock is Vapor’s only class of securities entitled to vote, each share being entitled to one vote. The presence at the Vapor special meeting, in person or by proxy, of holders of a majority of the issued and outstanding shares of Vapor common stock as of the record date is considered a quorum for the transaction of business. If Vapor stockholders submit a properly completed proxy or if they appear at the Vapor special meeting to vote in person, their shares of common stock will be considered part of the quorum. Abstentions and broker non-votes will be counted as present to determine if a quorum for the transaction of business is present. In the absence of a quorum, the Vapor special meeting will be adjourned or postponed.

The merger cannot be completed without Vapor stockholder approval of merger agreement and the issuance of common stock in connection with the merger. The affirmative vote of a majority of the outstanding shares of Vapor common stock as of the record date for the Vapor special meeting is required to approve the merger agreement and the issuance of Vapor common stock in connection with the merger.

48

On the record date, the directors and executive officers of Vapor as a group beneficially owned a total of 1,662,330 shares of Vapor common stock, representing approximately 9.9% of the issued and outstanding shares.

The proposals to (i) ratify the issuance of convertible debt and shares of common stock upon the conversion thereof in connection with the Bridge Financing Proposal, (ii) approve the issuance of Vapor common stock in connection with the convertible debt to be issued in the Pre-Closing Financing, and (iii) approve the issuance of Vapor common stock and warrants in connection with the Post-Closing Financing, each requires the affirmative vote of the holders of a majority of the shares of Vapor common stock present or represented by proxy at the Vapor special meeting and entitled to vote thereon.

Approval of the Vapor Adjournment Proposal requires the affirmative vote of a majority of the shares of Vapor common stock present in person or represented by proxy at the Vaporin special meeting and entitled to vote thereon.

The matters to be considered at the Vapor special meeting are of great importance to the stockholders of Vapor. Accordingly, you are urged to read and carefully consider the information presented in this joint proxy statement-prospectus, and to complete, date, sign and promptly return the enclosed proxy in the enclosed postage paid envelope as instructed on the proxy card or to vote by Internet or telephone.

Voting Rights; Proxies

If Vapor stockholders properly execute a proxy card and send it to Vapor in the enclosed envelope in a timely manner, their proxy will be voted in accordance with the instructions they indicate, unless they revoke their proxy prior to the vote. If Vapor stockholders send Vapor a proxy card that does not instruct Vapor how to vote, their shares will be voted (1) “FOR” approval of the merger agreement, (2) “FOR” approval of the proposal to ratify the Bridge Financing, (3) “FOR” approval of the Pre-Closing Financing, (4) “FOR” approval of the Post-Closing Financing and (5) “FOR” approval of the Vapor Adjournment Proposal.

Vapor stockholders may revoke their grant of a proxy at any time before it is voted by:

•

filing a written revocation of the proxy with the Secretary of Vapor;

​

•

executing a later Internet or telephone vote;

​

•

submitting a signed proxy card bearing a later date; or

​

•

attending and voting in person at the Vapor special meeting.

​

Written revocations should be sent to Harlan Press, Secretary, Vapor Corp., 3001 Griffin Road, Dania Beach, Florida 33312. Attendance at the Vapor special meeting will not in and of itself revoke a proxy, unless you choose to cast a ballot at such special meeting.

If Vapor stockholders use the Internet, they can change their vote at the Internet address shown on their proxy card. The Internet voting system is available 24 hours a day until 11:59 p.m., Eastern Time, on February 19, 2015.

If Vapor stockholders vote by telephone, they can change their vote by using the toll free telephone number shown on their proxy card. The telephone voting system is available 24 hours a day in the United States until 11:59 p.m., Eastern Time, on February 19, 2015.

The inspectors of election appointed for the Vapor special meeting, who will determine whether or not a quorum is present, will tabulate votes cast by proxy or in person at such special meeting. Abstentions, but not “broker non-votes,” will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Abstentions occur when proxies are marked as abstentions, or when stockholders appear in person but abstain from voting. “Broker non-votes” occur when a broker indicates on a proxy that it does not have discretionary authority regarding certain shares. Abstentions will have the effect of a vote AGAINST toe proposals at the Vapor special meeting, but broker non-votes will have no effect on any of the proposals at the Vapor special meeting.

49

If Vapor stockholders do not vote by proxy, telephone or internet or in person at the Vapor special meeting, it will have the effect of a vote AGAINST the merger agreement, the proposal to ratify the Bridge Financing, the Pre-Closing Financing, the Post-Closing Financing and approval of the Vapor Adjournment Proposal. Failure to vote may also affect whether a quorum is present.

Solicitation of Proxies

Vapor will bear all costs of soliciting proxies for the Vapor special meeting. Vapor may retain a third party proxy solicitation firm to assist in the solicitation of proxies. If a proxy solicitation firm is engaged by Vapor, the cost of this engagement is not expected to exceed $10,000. In addition, the directors, officers and employees of Vapor may solicit proxies for the Vapor special meeting from Vapor stockholders in person or by telephone. These directors, officers and employees will not be specifically compensated for their services. Vapor will also make arrangements with brokerage firms and other custodians, nominees and fiduciaries to send proxy materials to their principals and will reimburse those parties for their expenses in doing so.

50

PROPOSAL 1 OF THE VAPORIN SPECIAL MEETING — THE MERGER

Background of the Merger

Vaporin has been a supplier of an electronic smoking devices, which are alternatives to tobacco-based cigarettes, that utilize micro-electronic technology to provide users with a smoking experience without the tobacco and tar found in mainstream cigarettes since Vaporin was formed in 2012. Vaporin, more recently, entered the e-liquid and vaporizer markets. Vapor also sells electronic cigarettes, vaporizers and e-liquids under several different brands. In light of the nature of Vaporin’s and Vapor’s businesses and their close geographic proximity (Miami/Fort Lauderdale), management of each of Vaporin and Vapor generally is familiar with the other’s businesses, and representatives of Vaporin and Vapor have discussed their industry in general with one another at various points, such as at industry trade shows.

Vapor’s management and board of directors regularly review Vapor’s performance, prospects and strategy in light of the current business and economic environment, as well as developments in the e-cigarette and vaporizer industry, and opportunities and challenges facing participants in the industry. These reviews have included consideration, from time to time, of potential strategic alternatives, including strategic acquisitions, divestitures and business combination transactions. Similarly, Vaporin’s management and board of directors regularly review Vaporin’s performance, prospects and strategy in light of the current business and economic environment, and opportunities and challenges facing participants in this industry. These reviews have included consideration, from time to time, of potential strategic alternatives, including acquisitions, divestitures and business combination transactions.

On September 18, 2014, Jeffrey Holman, Vapor’s Chairman and Chief Executive Officer, was introduced to Michael Brauser, a stockholder of Vaporin and the father of its Chief Operating Officer, through a business acquaintance. On that same day, Messrs. Holman and Brauser executed a non-disclosure agreement. After this initial meeting, both Messrs. Holman and Brauser agreed that there were potential synergies for the two companies. On September 21, 2014, Messrs. Holman and Brauser met again and discussed the short term needs of Vapor including a potential financing and potential opportunities for the two companies.

On September 23, 2014, Mr. Holman and Mr. Brauser met with the executive team of Vaporin. They began potential merger discussions and developed a better and detailed understanding of each other’s operations and financials.

In late September or early October, Messrs. Holman, Brauser, and Vaporin’s Chief Executive Officer, Scott Frohman, met to discuss the details of a potential merger.

Through the first two weeks in October, Mr. Holman continued to have periodic conversations with Messrs. Frohman and Brauser. Mr. Holman provided informal updates to members of Vapor’s Board of Directors during this time.

On October 11, 2014, Messrs. Michael and Greg Brauser had a meeting with Mr. Holman.

On October 15, 2014, Messrs. Michael and Greg Brauser, and Jim Martin met with Messrs. Holman and Harlan Press. Following that meeting, representatives of Vaporin and Vapor had numerous telephone calls and email communications concerning the terms of the proposed merger. On October 17, 2014, the Board of Directors of Vapor met to discuss preliminary negotiations regarding a potential corporate transaction between Vapor and Vaporin. Also at the meeting was a representative of Vapor’s outside law firm as well as Harlan Press, Vapor’s Chief Financial Officer. Mr. Holman outlined for the Board the very preliminary terms of a business combination with Vaporin, specifically that Vapor would acquire Vaporin on a stock-for-stock transaction. Exploratory due diligence would need to commence to help further refine the terms of the potential transaction, and in particular, determine whether a merger involving the two businesses supported Vapor’s overall strategic goals. Following Mr. Holman’s update, the Vapor Board discussed the potential transaction structure and potential benefits associated with a merger of equals transaction, including the fact that the transaction would be generally tax-free to stockholders of Vapor and Vaporin. After conferring with its then outside law firm, to help mitigate any potential conflicts, the Board made the decision to form the M&A Committee comprised of Messrs. Barrett and Jaumot, both independent directors of Vapor. The M&A Committee was provided the authority to evaluate any proposed

51

transaction, assist management with negotiating the terms of any proposed transaction, and recommend to the Board approval of any proposed transaction. The Vapor Board of Directors directed management to continue exploring a potential business combination with Vaporin.

On October 22, Vapor’s M&A Committee met, together with Messrs. Holman and Press, to receive an update on the status of management’s discussions with Vaporin. Mr. Jaumot, the M&A Committee’s Chairman, asked management for an update on the proposed transaction, including any updates on potential business, financial, and legal considerations based on due diligence conducted to date. The M&A Committee discussed the need to engage an independent investment banker to assist the Vapor Board of Directors in valuing the transaction and directed Mr. Holman to begin gathering proposals from investment bankers.

In late October and the beginning of November, while continuing mutual due diligence, the parties discussed preliminary terms of a proposed merger. Between October 24 and October 29, Mr. Holman compiled a list of terms to be presented to Vaporin in an initial term sheet.

On October 29, 2014, Vapor’s M&A Committee held a meeting. Besides the M&A Committee members, Mr. Holman and representatives of Vapor’s outside law firm, Gunster, Yoakley & Stewart, P.A. (“Gunster”), were in attendance. A representative of Gunster discussed with members of the M&A Committee the legal standards applicable to the M&A Committee’s decisions and actions with respect to a potential business combination transaction. In addition, representatives of Gunster detailed the terms of the proposed merger with Vaporin. The M&A Committee discussed the critical need for additional financing and weighed various proposed alternative financing strategies, including receiving financing in connection with the Vaporin transaction. The members of the M&A Committee also discussed with management the strategic rationale for the proposed merger with Vaporin, including the fact that Vaporin had a retail presence and a strong Internet presence and the prospect of creating a stronger competitor in the e-cigarettes and vapor industries by combining the two companies. While the M&A Committee determined that it was premature to make a recommendation to the full Board of Directors as to whether the Vaporin transaction should proceed, the M&A Committee approved the general terms to be proposed by Vapor, including that before any definitive agreement was executed Vapor could conduct further due diligence and receive a fairness opinion from an independent investment banker, and directed management to continue to pursue the transaction.

On October 30, 2014, legal counsel to Vapor and Vaporin had a telephone call to discuss issues related to the transactions and drafting of the merger agreement. Later that day, Vapor sent Vaporin an initial term sheet. Counsel to Vapor and Vaporin exchanged drafts of the term sheet over the course of the next two days.

On November 1, 2014, the parties executed a nonbinding term sheet that included a binding confidentiality agreement. The nonbinding term sheet contemplated a $1.0 million bridge financing to be funded by certain stockholders of Vaporin. Over the course of the next several days, Mr. Michael Brauser, a Vaporin consultant, assisted in coordinating the Bridge Financing, including introducing Vapor to Palladium Capital Advisors, LLC (“Palladium”), a broker-dealer that would act as a placement agent for the Bridge Financing. The terms of the Bridge Financing were negotiated between Mr. Michael Brauser, Vapor, and Palladium.

On November 3, 2014, Mr. Michael Brauser, members of management of both Vapor and Vaporin, and legal counsel for both companies had a telephone call to discuss issues related to the transaction and drafting of the Form S-4.

On November 4, 2014, the parties noted unusual trading activity in Vapor’s common stock. Because the parties were concerned that the unusual trading activity could be due to a leak of information regarding the proposed merger between Vapor and Vaporin, the parties discussed executing a binding term sheet and announcing the execution of the binding term sheet rather than waiting to announce the merger until after a definitive agreement was negotiated and executed. Over the next two days, Mr. Brauser, Mr. Holman, and Palladium continued to negotiate the terms of the Bridge Financing.

52

On November 5, 2014, Mr. Brauser, members of management of both Vapor and Vaporin, and legal counsel for both companies had a telephone call to discuss issues related to the transaction and drafting of the Form S-4. On November 6, 2014, Mr. Brauser, members of management of both Vapor and Vaporin, and legal counsel for both companies had a telephone call to discuss issues related to the transaction and drafting of the Form S-4.

On November 6, 2014, Mr. Brauser, Vapor, and Palladium executed a binding term sheet for the Bridge Financing. In addition, on November 6, 2014, Vapor and Vaporin executed a binding term sheet for the proposed merger, which contemplated the Bridge Financing (“Binding Term Sheet”). Late in the afternoon on November 6th, the parties announced entering into the Binding Term Sheet. Under the Binding Term Sheet, Mr. Michael Brauser and another Vaporin stockholder agreed to provide the required $1 million Bridge Financing within five days. Mr. Michael Brauser did not participate in the ultimate Bridge Financing. The Binding Term Sheet was subject to continued due diligence and advice from Vapor’s and Vaporin’s financial advisors.

Beginning on November 7, 2014, Mr. Michael Brauser, Vapor officers, and representatives of Palladium continued to negotiate the transaction documents for the Bridge Financing. On November 14, 2014, Vapor held a meeting of its Board of Directors to consider the final terms of the Bridge Financing. Representatives of Gunster also attended the meeting. Upon Board approval, Vapor closed the Bridge Financing in the amount of  $1.25 million with several accredited investors, as contemplated by the Binding Term Sheet.

On November 7, 2014, legal counsel for Vaporin and Vapor had a telephone call to discuss issues related to the transaction and drafting of the merger agreement. Over the next several weeks, the parties continued to conduct mutual due diligence and Mr. Holman met with senior members of Vaporin’s management to discuss terms, due diligence items, and business prospects of a combined company.

On November 11, 2014, Mr. Brauser, members of management of both Vapor and Vaporin, and legal counsel for both companies had a telephone call to discuss issues related to the transaction and drafting of the merger agreement.

On November 20, 2014, legal counsel for Vaporin and Vapor had a telephone call to discuss issues related to the transaction and drafting of the merger agreement.

Beginning in October and continuing through mid-November, Mr. Holman gathered proposals from various investment banks to act as Vapor’s financial advisor and to issue a fairness opinion to Vapor’s Board of Directors with respect to the Vapor merger with Vaporin. Mr. Holman contacted investment banks selected in part based on the recommendation from the M&A Committee. The Vapor M&A Committee met on November 20, 2014 to review the various proposals and approved the engagement of Cassel Salpeter. Mr. Holman and representatives of Gunster also attended the meeting.

On November 21, 2014, legal counsel for Vaporin and Vapor had a telephone call to discuss issues related to the transaction and drafting of the merger agreement. On November 24, 2014, legal counsel for Vaporin and Vapor had a telephone call to discuss issues related to the transaction and drafting of the merger agreement.

On November 26, 2014, Gunster delivered initial drafts of the merger agreement and related documents to Vaporin’s counsel, Nason, Yeager, Gerson, White, & Lioce, P.A. (“Nason Yeager”). Among other things, the initial draft of the merger agreement required Vaporin to pay a termination fee of $500,000 to Vapor if the merger agreement was terminated under certain scenarios. Over the course of the following approximately two weeks, representatives of Vaporin and Vapor conducted additional due diligence on each other and legal representatives exchanges drafts of the merger agreement.

In November 2014, Mr. Brauser approached both Vaporin and Vapor with a proposal for the two companies to create a joint venture to accelerate both companies’ strategies to increase their retail presence. On December 1, 2014, Nason Yeager delivered initial drafts of the joint venture documents, including a Limited Liability Company Agreement and financing agreements, to Vapor’s counsel.

On December 2, 2014 and December 5, 2014, legal counsel for Vaporin and Vapor had a telephone call to discuss issues related to the transaction and drafting of the merger agreement.

53

On December 9, 2014, Mr. Michael Brauser, members of management of both Vapor and Vaporin, and legal counsel for both companies had a telephone call to discuss open deal issues. On December 9, 2014, Vaporin retained Dawson James for the purpose of determining whether the merger was fair to Vaporin stockholders from a financial point of view.

Over the course of the next two weeks, the parties continued to negotiate the merger agreement and the operating agreement for the joint venture. The parties substantially concluded their due diligence by December 12, 2014.

On December 14, 2014, Vapor’s M&A Committee reconvened to discuss the terms of the definitive merger agreements and the results of due diligence. The members of the M&A Committee discussed the status of the proposed merger and their review of the definitive merger agreement.

On December 15, 2014, a conference call was held with Messrs. Scott Frohman, Greg Brauser and Jim Martin of Vaporin, Messrs. Jeff Holman and Harlan Press of Vapor and lawyers form Nason Yeager and Gunster. During the call, open deal points were discussed.

Later on December 15, 2014, Vaporin’s Board of Directors met with counsel form Nason Yeager and, for a portion of the meeting, a representative of Dawson James. The Dawson James representative provided a PowerPoint slide presentation and explained the rationale for that firm’s conclusion that the merger consideration was fair, from a financial point of view, to the stockholders of Vaporin. Following the presentation, the Vaporin directors considered the fairness opinion and the draft merger agreement which had been distributed to the Board members on December 12, 2014. The Board agreed to recommend the merger and the merger agreement to the Vapor stockholders.

On December 15, 2014, Vapor convened a joint meeting of Vapor’s M&A Committee and Board of Directors. Representatives of Gunster and Cassel Salpeter were present at portions of the meeting. At the request of Vapor’s M&A Committee, Cassel Salpeter then reviewed and discussed its financial analyses with respect to Vaporin, Vapor and the proposed merger. Thereafter, Cassel Salpeter rendered its oral opinion to the Vapor M&A Committee (which was confirmed in writing by delivery of Cassel Salpeter’s written opinion dated the same date) to the effect that, as of such date and subject to the procedures followed, assumptions made, matters considered, and qualifications and limitations on the review undertaken by Cassel Salpeter in connection with the preparation of such opinion, the merger consideration to be issued by Vapor in the merger pursuant to the merger agreement was fair to Vapor from a financial point of view. In addition, representatives of Gunster reviewed with the Board members the most recent draft of the proposed merger agreement, including the terms related to the price and the preliminary financial metrics for a post-closing financing that would be a condition to close the merger, as well as the legal standards applicable to the Board’s decisions and actions with respect to the proposed transaction, as they had previously done. Following presentations by management including Mr. Holman and Mr. Press, Vapor’s Chief Financial Officer, and discussion among the members of the M&A Committee, the M&A Committee unanimously recommended that the Board of Directors approve the merger with Vaporin. Following the recommendation of the M&A Committee, after further discussion among the members of the Board, including consideration of the factors described under “Recommendation of Vapor’s Board of Directors and Reasons for the Merger”, the Board (1) determined that the merger agreement, the merger, and the other transactions contemplated thereby are advisable and in the best interests of Vapor and its stockholders, (2) adopted the merger agreement, the voting agreements, and approved the transactions contemplated thereby, (3) directed that the merger agreement be submitted for adoption by Vapor’s stockholders, and (4) recommended that Vapor’s stockholders adopt the merger agreement.

From December 15, 2014 through December 17, 2014, Gunster and Nason Yeager continued to negotiate the remaining open items in the merger agreement, specifically the parameters of the post-closing financing that was to provide up to $25 million in additional financing based on the achievement of certain financial metrics.

On December 17, 2014, Messrs. Brauser, Holman, and Martin finalized the financial metrics for the post-closing financing, which were not materially different than the metrics reviewed and approved by the Vapor and Vaporin Boards of Directors.

54

On the evening of December 17, 2014, Vaporin and Vapor executed the merger agreement and the limited liability company agreement for the joint venture entity, Emagine the Vape Store, LLC, and before the opening of trading on December 18, 2014, issued a joint press release announcing these transactions.

Recommendation of Vaporin’s Board of Directors and Reasons for the Merger

Vaporin’s Board of Directors believes that the merger is in the best interests of Vaporin and its stockholders. Accordingly, Vaporin’s Board of Directors has approved the merger agreement and recommends that stockholders vote “FOR” the approval of the merger agreement.

In reaching its decision to approve the merger agreement, Vaporin’s Board of Directors consulted with Vaporin’s outside legal counsel and Vaporin’s financial advisors regarding the merger and considered a variety of factors, including the following:

•

greater growth prospects and higher stockholder value than if Vaporin continued to operated alone; and

​

•

leveraging Vaporin’s streamlined supply chain, marketing strategies, and innovative product lines with Vapor’s wide distribution capabilities to gain a large market share in the vaporizer market.

​

The Vaporin Board of Directors also considered potential risks relating to the merger, including the following:

•

the need for Vapor to obtain the approval of its stockholders for the merger and the issuance of Vapor common stock pursuant to the merger agreement;

​

•

the potential for diversion of management and employee attention, and for employee attrition, during the period prior to the completion of the merger and the potential effect on Vaporin’s business and relations with customers, service providers and other stakeholders, whether or not the merger is completed;

​

•

the merger agreement provisions generally requiring Vaporin to conduct its business in the ordinary course and the other restrictions on the conduct of Vaporin’s business prior to completion of the merger, which may delay or prevent Vaporin from undertaking business opportunities that may arise pending completion of the merger;

​

•

the risk that the consideration to be paid to Vaporin stockholders could be adversely affected by a decrease in the trading price of Vapor common stock during the pendency of the merger;

​

•

expected benefits and synergies sought in the merger;

​

•

the challenges of integrating the businesses, operations and employees of Vaporin and Vapor;

​

•

certain provisions of the merger agreement prohibit Vaporin from soliciting, and limit its ability to respond to, proposals for alternative transactions;

​

•

Vaporin’s obligation to pay to Vapor a termination fee of  $500,000 if Vaporin recommends or accepts an alternative acquisition proposal may deter others from proposing an alternative transaction that may be more advantageous to Vaporin’s stockholders;

​

•

the possible effects on Vaporin should the parties fail to complete the merger, including the possible effects on Vaporin’s capital stock and the associated business and opportunity costs;

​

•

the benefits from Vapor’s management team and independent directors;

​

•

that Vaporin’s directors and executive officers have interests in the merger that are different from or in addition to those of its stockholders generally, as described in the section entitled “Proposal 1 of the Vaporin Special Meeting — The Merger — Interests of Certain Persons in the Merger — Interests of Vaporin Executive Officers and Directors in the Merger” on page 57; and

​

•

the other risks described in the section entitled “Risk Factors” beginning on page 21 and the risks of investing in Vapor common stock identified in the Risk Factors sections of Vapor’s periodic reports filed with the SEC and incorporated by reference herein.

​

55

The discussion of the information and factors considered by the Vaporin Board of Directors is not exhaustive, but includes the material factors considered by the Vaporin Board of Directors. In view of the wide variety of factors considered by the Vaporin Board of Directors in connection with its evaluation of the merger and the complexity of these matters, the Vaporin Board of Directors did not attempt to quantify, rank or otherwise assign relative weights to the specific factors that it considered in reaching its decision. Furthermore, in considering the factors described above, individual members of Vaporin’s Board of Directors may have given different weights to different factors. The Vaporin Board of Directors (consisting of employees of Vaporin) evaluated the factors described above, including asking questions of Vaporin’s management and Vaporin’s legal and financial advisors, and reached the unanimous decision that the merger was in the best interests of Vaporin and its stockholders. The Board of Directors realized there can be no assurance about future results, including results expected or considered in the factors listed above. However, the Board of Directors concluded the potential positive factors outweighed the potential risks of completing the merger. It should be noted that this explanation of the Vaporin Board of Directors’ reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading “Forward-Looking Statements” beginning on page 29.

On the basis of these considerations, Vaporin’s Board of Directors unanimously approved the merger agreement.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF VAPORIN VOTE “FOR” THE APPROVAL OF THE MERGER AGREEMENT.

Board of Directors of Vapor Post-Merger

Upon closing of the merger, pursuant to the terms of the merger agreement, the Vaporin Board will be comprised of five members, three of whom will consist of the current board members of Vapor (at least two of whom will be independent under the Nasdaq listing standards) and two additional members who will be designees of Vaporin (at least one of whom will be independent under the Nasdaq listing standards). See the Section entitled “New Directors and Executive Officers of Vapor Post-Merger” below. Vapor will also nominate the Vaporin designees at its next annual meeting of stockholders and recommend to its stockholders the election of such designees at any subsequent stockholders’ meetings at which directors are elected through December 31, 2015.

New Directors and Executive Officers of Vapor Post-Merger

Gregory Brauser, Vaporin’s Chief Operating Officer, will be appointed as one of Vaporin’s director designees. As of the filing date of this proxy statement/prospectus, Vaporin has not determined who the other designee would be. Additionally, James Martin, Vaporin’s Chief Financial Officer, will be appointed as an executive officer of Vapor following the merger. Information about these two appointees is provided below.

Gregory Brauser, 29, has served as Chief Operating Officer of Vaporin since the Vaporin Florida share exchange. Mr. Brauser founded Direct Source China in 2009, a sourcing company headquartered in Shanghai, China, that assists mid-size U.S. businesses with their direct manufacturing overseas. Since 2010, Mr. Brauser has served as Vice Chairman and director of Dog-E-Glow, Inc., a manufacturer and distributer of LED lighted dog collars and leashes, which he formed. For his services as the Chief Operating Officer of Vaporin, Mr. Brauser is paid a salary of  $120,000 per year.

James Martin, 48, has served as Chief Financial Officer of Vaporin since April 1, 2014. Since January 2011, Mr. Martin has served as Chief Financial Officer of Non-Invasive Monitoring Systems, Inc. (“NIMS”), a publicly-held medical device company. From January 2011 through October 2013, Mr. Martin served as Chief Financial Officer of SafeStitch Medical, Inc. (“SafeStitch”), a publicly-held medical device company. From January 2011 through December 2011, Mr. Martin also served as Vice President of Finance of Aero Pharmaceuticals, Inc. (“Aero”), a privately held pharmaceutical distributor that voluntarily dissolved in December 2011. From July 2010 through January 2011, Mr. Martin served as Controller of each of NIMS, SafeStitch and Aero. Also from May 2008 through July 2010, Mr. Martin served as

56

Controller of AAR Aircraft Services-Miami, a subsidiary of AAR Corp, an aerospace and defense company in which he was responsible for all financial reporting and inventory logistics. Mr. Martin is a Certified Public Accountant in Florida. Mr. Martin is currently paid an annual salary of  $135,000 by Vaporin.

Interests of Certain Persons in the Merger

Interests of Vaporin Executive Officers and Directors in the Merger

In considering the recommendations of the Vaporin Board of Directors, Vaporin’s stockholders should be aware that some of the executive officers and directors of Vaporin have interests in the merger that differ from, or may be in addition to, the interests of Vaporin’s stockholders. These interests may present such executive officers and directors with actual or potential conflicts of interests, and these interests, to the extent material, are described below:

Ownership of Vaporin

Some of the officers and directors of Vaporin currently own Vaporin common stock and some of the officers and directors of Vaporin have been granted Vaporin stock options and RSUs, which will be assumed by Vapor upon the closing of the merger. As of December 24, 2014, such officers and directors beneficially owned an aggregate of approximately 1.1 million shares of Vaporin common stock and approximately 400,000 RSUs.

Post-Merger Employment

Pursuant to the merger agreement, Vapor will honor the existing employment arrangements between Vaporin and its officers and expects to enter into new employment agreements with certain Vaporin executive officers that become effective upon the closing of the merger.

Indemnification; Directors’ and Officers’ Insurance

Pursuant to the merger agreement, for a period of six years after the effective time of the merger, Vapor has agreed to indemnify, defend, hold harmless and advance expenses to each present and former officer and director of Vaporin and its subsidiaries to the fullest extent authorized or permitted by law. Vapor also has agreed that all rights to indemnification and advancement of expenses from liabilities under Vaporin’s certificate of incorporation with respect to acts or omissions occurring prior to the effective time of the merger now existing in favor of current and former officers and directors of Vaporin or any of its subsidiaries will survive the merger and continue in full force and effect in accordance with the their terms and without regard to any subsequent amendment thereof.

The merger agreement further provides that Vapor will cause the officers and directors of Vaporin and its subsidiaries to be covered for a period of six years after the effective time of the merger under an extension of Vaporin’s existing directors’ and officers’ liability insurance policy, provided, however, that Vapor is only required to obtain such coverage at an aggregate cost not to exceed 200% of the annual premium currently paid by Vaporin for such coverage.

Summary of Payments and Benefits to Directors and Officers

Directors and officers of Vaporin are not expected to receive any compensation based on or related to the merger that has not already accrued or vested in them, other than the acceleration of vesting of stock options and restricted stock awards as discussed below.

Equity Compensation Awards

Vaporin’s directors and executive officers participate in Vaporin’s equity-based compensation plans and hold outstanding stock options and restricted stock granted under such plans. All of the outstanding Vaporin stock options and RSUs will become vested and will be assumed by Vapor upon the closing of the merger.

57

Outstanding Equity Awards

Listed below is information with respect to unexercised options, stock and RSU’s that have not vested, and equity incentive plan awards for each executive officer and director outstanding as of the record date:

(1)

Represents unvested RSUs which will fully vest upon the closing of the merger. Market value is based on the closing price of Vaporin’s common stock on the record date.

​

The table above does not include any vested securities of Vaporin’s executive officers and directors. The following executives have been issued the following equity grants which are currently vested:

Vaporin’s Transactions with Related Persons

Loans and Financing Agreements

Mr. Barry Honig, a 5% beneficial owner of Vaporin common stock, is a member of Pershing’s Board of Directors. Prior to the Pershing asset acquisition, certain entities under Mr. Honig’s control held over 5% of Vaporin’s securities. Additionally, entities under Mr. Honig’s control purchased 5,000,000 shares of Vaporin’s Series A Preferred Stock for $2,000,000.

Between July 2013 and August 2013, Vaporin issued Mr. Honig secured convertible promissory notes for a total amount of  $125,000. In 2014, $50,000 of these notes were repaid. In connection with the acquisition of Vaporin Florida, Mr. Honig and entities he controls were issued 33,333 shares of Series C Preferred Stock.

In connection with the acquisition of Vaporin Florida, Vaporin also issued 33,333 shares of Series C Preferred Stock to Melechdavid, Inc., an entity controlled by Mr. Mark Groussman, a 5% beneficial owner of Vaporin common stock. In addition, in August 2013, Vaporin issued Mr. Groussman, through Melechdavid, Inc., secured convertible promissory notes for a total amount of  $125,000.

In September 2014, Messrs. Honig and Groussman entered into agreements with Vaporin to amend the conversion price of the 10% convertible notes held by them from $10.00 per share to $7.50 per share. Mr. Honig converted the full amount owed him under his note, consisting of  $75,000 of original principal and $7,500 in accrued interest, into 11,000 shares of Vaporin common stock. Mr. Groussman, through Melechdavid, Inc., converted the full amount owed him under his note, consisting of  $125,000 of original principal and $12,500 in accrued interest, into 18,334 shares of Vaporin common stock.

58

Michael Brauser, a 5% stockholder and the father of Gregory Brauser, Vaporin’s Chief Operating Officer, was an original investor in and manager of Vaporin Florida. Mr. Michael Brauser lent approximately $636,000 to Vaporin Florida and was issued a convertible note. Mr. Michael Brauser converted $350,000 and was issued Series A Preferred Stock of Vaporin Florida. In connection with the Vaporin Florida acquisition, Mr. Michael Brauser was issued 33,334 shares of Series C Preferred Stock in exchange for the cancellation of the Vaporin Florida Series A and the outstanding portion of the note.

In December 2014, Messrs. Honig and Michael Brauser agreed to loan $1,000,000 each to Emagine, of which Vaporin and Vapor each presently own 50% and Vaporin is the manager. Upon funding, Messrs. Honig and Michael Brauser each will receive a note that matures on March 31, 2016, bears interest at 12% per annum, and will be secured by a first lien on the assets of Emagine. As of the date of this joint proxy statement-prospectus, no funds had been advanced under these loan commitments.

Consulting Agreements

In April 2014, Vaporin entered into a consulting agreement with Recruitme, LLC, an entity owned by the brother-in-law of Mr. Honig. Pursuant to the consulting agreement, Vaporin issued 100,000 shares of common stock. Recruitme, LLC is also entitled to 5% of the gross revenues generated by sales to customers introduced to Vaporin by Recruitme, LLC.

In May 2014, Vaporin entered into a consulting agreement with Marlin Capital Investments, LLC, an entity jointly controlled by Messrs. Honig and Michael Brauser. Pursuant to the consulting agreement, Vaporin issued Marlin Capital Investments, LLC 400,000 RSUs vesting quarterly over two years in equal increments.

Supply Agreements

Vaporin previously purchased products from Direct Source China, LLC (“Direct Source”), an entity controlled by Gregory Brauser. Direct Source purchased the products directly from the manufacturers in China and allowed Vaporin to develop direct relations with manufacturers in China. Vaporin paid Direct Source an 8% administrative premium. Vaporin paid Direct Source net of all credits approximately $509,000 for products under this arrangement. As of September 30, 2014, Direct Source is no longer a material supplier Vaporin sources its hardware from multiple non-affiliated manufacturers located in China without paying any fees to Direct Source.

Vaporin Board Considerations

The Vaporin Board of Directors was aware of all of the above different and/or additional interests and considered them, among other matters, in their respective evaluations and negotiations of the merger agreement.

Ownership Interests of Directors and Executive Officers

The following table sets forth the number of shares of Vaporin voting stock beneficially owned as of the record date, and the number of shares of Vapor voting stock that will be beneficially owned post-merger (assuming an exchange ratio of 2.07), by (i) those persons known by Vaporin to be beneficial owners of more than 5% of Vaporin’s voting stock, (ii) each Vaporin, (iii) each of our executive officers, and (iv) all executive officers and directors as a group. Unless otherwise specified in the notes to this table, the address for each person is: c/o Vaporin, 4400 Biscayne Boulevard, Miami, Florida 33137.

59

(1)

For purposes of this table, a person is considered to beneficially own shares of common stock if he or she directly or indirectly has or shares voting power, which includes the power to vote or to direct the voting of the shares, or investment power, which includes the power to dispose or direct the disposition of the shares, or if he/she has the right to acquire the shares under options which are exercisable currently or within 60 days of the record date. Unless otherwise indicated in the footnotes to this table, Vaporin believes that each of the stockholders named in the table has sole voting and investment power with respect to the shares indicated as beneficially owned by them.

​

Applicable percentages for Vaporin shares are based on 4,893,252 shares of common stock outstanding and 1,650,000 shares of common stock underlying outstanding preferred stock as of the record date. Applicable percentages for Vapor shares post-merger are based on 30,203,444 shares of common stock outstanding upon completion of the merger and do not involve any additional shares of Vapor common stock being outstanding. The number of shares of Vapor common stock owned post-merger and the percentages assume no additional Vapor equity is issued. Because Vapor must complete a $3.5 million equity financing which will close immediately following the merger, the number of post-merger shares outstanding will increase and the percentage beneficially owned by the stockholders in the table will decrease.

(2)

Vaporin’s Chief Executive Officer and member of Vaporin’s board of directors. Post-Merger beneficial ownership includes approximately an additional 415,000 shares of common stock issuable upon accelerated vesting of RSUs in connection with the merger.

​

(3)

Member of Vaporin’s board of directors. Shares held jointly with spouse.

​

(4)

Vaporin’s Chief Operating Officer and director designee. Post-merger beneficial ownership includes approximately an additional 415,000 shares of common stock issuable upon accelerated vesting of RSUs in connection with the merger.

​

(5)

Vaporin’s Chief Financial Officer.

​

(6)

Vaporin’s former Chief Executive Officer and former director. Address is 1640 Terrace Way, Walnut Creek, California 94597.

​

(7)

Pre-merger ownership includes 30,000 shares held by Grander Holdings 401K Inc., of which the reporting person is the trustee. Does not include all of the shares of common stock issuable upon the conversion of preferred stock pre-merger as a result of a 9.99% blocker.

​

Post-Merger beneficial ownership includes approximately an additional 415,000 shares of common stock issuable to an entity controlled by Mr. Brauser upon accelerated vesting of RSUs in connection with the merger.

60

(8)

Pre-merger ownership includes (i) 168,334 shares of common stock and (ii) 25,000 warrants held by Melechdavid, Inc. over which the reporting person has voting and dispositive power over the securities reported. Does not include all of the shares of common stock issuable upon the conversion of preferred stock pre-merger as a result of a 9.99% blocker. Address is 100 South Pointe Drive, #1405, Miami Beach, Florida 33418.

​

(9)

Pre-merger ownership includes (i) 44,750 shares of common stock held individually by Mr. Barry Honig and (ii) 77,923 shares of common stock held by entities of which the reporting person is the trustee. Does not include all of the shares of common stock issuable upon the conversion of preferred stock pre-merger as a result of a 9.99% blocker.

​

Post-merger beneficial ownership includes approximately an additional 415,000 shares of common stock issuable to an entity controlled by Mr. Honig upon accelerated vesting of RSUs in connection with the merger. Address is 555 South Federal Highway, Suite 450, Boca Raton, Florida 33432.

Golden Parachute Compensation Payable to Vapor Named Executive Officers

None of Vapor’s executive officers will receive any type of golden parachute compensation that is based on or otherwise relates to the merger.

Opinion of Vaporin’s Financial Advisor

Vaporin Inc. requested the opinion of Dawson James as to the fairness, from a financial point of view, to Vaporin’s stockholders, of the consideration to be received in a proposed merger transaction between Vapor Corp., a Delaware corporation and Vaporin, a Delaware corporation, (collectively, “the Parties”). Pursuant to a binding Term Sheet dated November 6, 2014 (the “Term Sheet”) between Vaporin and Vapor, the merger agreement will provide for the acquisition of Vaporin by Vapor through a statutory merger (the “Transaction”) with Vapor being the surviving corporation upon consummation of the merger. By signing the Term Sheet, the Parties have agreed to negotiate in good faith and to execute a Definitive Agreement as soon as possible, but in any event prior to December 21, 2014, and to otherwise use best efforts to consummate the transactions contemplated by the Term Sheet on an expedited basis. Dawson James issued its opinion as to fairness on December 12, 2014. The Opinion and a summary of our analysis supporting the Opinion are set forth below. For ease of discussion, the Transaction can briefly be summarized as follows:

(i)

The Parties have agreed to negotiate in good faith and to execute a definitive agreement as soon as possible, but in any event prior to December 21, 2014, and to otherwise use best efforts to consummate the transactions contemplated by the Term Sheet on an expedited basis.

​

(ii)

As consideration for the merger, the Term Sheet provides that the stockholders of Vaporin would be entitled to receive the number of shares of the Registrant’s common stock such that the former Vaporin stockholders would collectively own 45.0% of the issued and outstanding shares of common stock of the combined company following consummation of the merger, subject to any adjustments to the exchange ratio which would be necessary to permit the respective financial advisers of both the Registrant and Vaporin to make the determination that the merger consideration is fair from a financial perspective.

​

(iii)

The Term Sheet provides that the shares of the Registrant’s common stock to be issued in upon consummation of the proposed merger will be registered on a Form S- 4 registration statement (the “Registration Statement”) to be filed with the U.S. Securities and Exchange Commission.

​

In arriving at our opinion, we have (i) reviewed the Term Sheet dated November 6, 2014; (ii) reviewed certain publicly available business and financial information concerning Vaporin and Vapor, and the industry in which they operate; (iii) compared the proposed financial terms of the Transaction with the publicly available financial terms of certain transactions involving companies we deemed relevant and the consideration received for such companies; (iv) compared the financial and operating performance of Vaporin and Vapor with publicly available information concerning certain other companies we deemed relevant and (v) reviewed certain internal financial analyses and forecasts prepared by the management of Vaporin relating to its business; (vi) performed such other financial studies and analyses and considered

61

such other information as we deemed appropriate for the purposes of this opinion; (vii) assumed that all representations and warranties set forth in the Term Sheet and all ancillary agreements and documents are true and correct; (viii) assumed that each party to the Term Sheet did or will comply with its obligations under the Term Sheet; (ix) assumed that the Transaction contemplated by the Term Sheet does not violate (and did not cause, and will not cause, Vaporin to violate) any provisions of the Securities Act of 1933, Securities Exchange Act of 1934 or the Investment Company Act of 1940; and (x) conducted a physical site visits of both Vaporin and Vapor headquarters in Florida.

In addition, we have held discussions with members of the management of Vaporin and Vapor with respect to certain aspects of the Transaction, and the past and current business operations of Vaporin, the financial condition and future prospects and operations of Vaporin, the effects of the Transaction on the financial condition and future prospects of Vaporin, and certain other matters we believed necessary or appropriate to our inquiry; and we had discussions with counsel to Vaporin and Vapor with respect to legal matters related to the Transaction.

In giving our opinion, we have relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with us by Vaporin and its subsidiaries, or otherwise reviewed by or for us. We have not independently verified (nor have we assumed responsibility or liability for independently verifying) any such information or its accuracy or completeness. We have not conducted or been provided with any valuation or appraisal of any assets or liabilities, other than as stated in public SEC filings, nor have we evaluated the solvency of Vaporin or Vapor under any state or federal laws relating to bankruptcy, insolvency or similar matters.

In relying on financial analyses and forecasts prepared and provided to us by Vaporin and its subsidiaries or derived therefrom, we have assumed that they have been reasonably prepared based on assumptions reflecting the best currently available estimates and judgments of management of Vaporin and its subsidiaries as to the expected future results of operations and financial conditions of Vaporin, as applicable. We express no view as to such analyses or forecasts or the assumptions on which they were based. We have also assumed the Transactions contemplated by the Term Sheet will be consummated as described in the Term Sheet, and that the Definitive Agreement will not differ in any material respects from the Term Sheet. We have also assumed that the representations and warranties made by Vaporin and Vapor in the Term Sheet and the related documents and agreements are and will be true and correct in all respects material to our analysis. We are not legal, regulatory or tax experts and have relied on the assessments made by advisors to Vaporin with respect to such issues. We have further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the Transaction are current or will be obtained without any adverse effect on Vaporin or Vapor on the contemplated benefits of the Transaction, in each case material to our analysis.

Our opinion is necessarily based on economic, market and other conditions as in effect on, and the information made available to us as of, the date hereof. It should be understood that subsequent developments may affect this opinion and that we do not have any obligation to update, revise, or reaffirm this opinion. Our opinion is limited to the fairness, from a financial point of view, to Vaporin of the Transaction Consideration, and we express no opinion as to the fairness of the Vaporin merger to, or any consideration to be received by, the holders of any other class of securities, creditors or other constituencies of Vaporin or Vapor, or any of its subsidiaries, the holders of any class of securities, creditors or other constituencies of Vapor or as to the underlying decision by the Parties to engage in the Transaction. Furthermore, we express no opinion with respect to the amount, nature, or propriety of any compensation to any officers, directors, or employees of any party to the Transaction, or any class of such persons, whether in connection with the Transaction or otherwise, nor do we express any opinion with respect to the fairness of any such compensation. We express no opinion herein as to the price at which Vaporin’s Common Stock, Vapor’s Common Stock or any surviving corporation’s Common Stock will trade at any future time.

We note that, in connection with performing our services to Vaporin, we were not authorized to and did not solicit any expressions of interest from any other parties with respect to any other merger, sale, disposition, acquisition, or other business combination involving all or any part of Vaporin.

We have not acted as a financial advisor to Vaporin, Vapor or any other party to the Transaction; and we will not be receiving any fees for any services related to the proposed Transaction except for the fees for

62

providing this Opinion. Our fee is neither contingent nor formula-based, and we will not receive any other significant payment or compensation contingent upon the successful completion of the Transaction, nor is our compensation contingent upon the outcome of the Opinion or Dawson James acting in some other capacity. Vaporin has agreed to indemnify us for any liabilities arising out of our engagement to provide this fairness opinion. During the two years preceding the date of this letter, neither we nor our affiliates have had any commercial or investment banking relationships with Vaporin or Vapor or any other party to the Transaction.

Notwithstanding the aforementioned, from time to time, we and/or our affiliates may perform various investment banking and financial services for Vaporin, or Vapor and their affiliates in the future, and we would expect to receive customary fees for such services. In the ordinary course of our businesses, we and our affiliates may actively trade the debt and equity securities of Vaporin or Vapor for our own account or for the accounts of customers and, accordingly, we may at any time hold long or short positions in such securities.

On the basis of and subject to the foregoing, we stated our opinion as of the date of the Opinion that the Transaction Consideration to be received by Vaporin stockholders in the proposed Transaction is fair, from a financial point of view.

The issuance of the Opinion Letter was approved by a Fairness Opinion Committee of Dawson James Securities Inc. This Letter was provided to the Board of Directors of Vaporin in connection with and for the purposes of its evaluation of the Transaction. This opinion does not constitute a recommendation or advice to any shareholder of Vaporin with respect to the Transaction or any other matter.

Dawson James’ opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to Dawson James as of, the date of its opinion. Subsequent developments may affect Dawson James’ opinion and that Dawson James does not have any obligation to update, revise, or reaffirm its opinion.

The terms set forth in the Term Sheet, including the consideration payable to Vaporin for the proposed merger, were determined through negotiation between Vaporin and Vapor. The decision to enter into the Term Sheet was solely that of the Vaporin and Vapor Boards of Directors. Dawson James’ opinion and financial analyses was only one of the many factors considered by Vaporin in its evaluation of the proposed transaction and should not be viewed as determinative of the views of the Vaporin Board of Directors or management with respect to the proposed merger or the Transaction Consideration.

In accordance with customary investment banking practice, Dawson James employed generally accepted valuation methods in reaching its opinion. The following is a summary of the material financial analyses used by Dawson James in connection with providing its opinion and does not purport to be a complete description of the analyses or data presented by Dawson James. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Dawson James believes that the summary set forth below and its analyses must be considered as a whole and that selecting portions thereof, or focusing on information in tabular format, without considering all of its analyses and the narrative description of the analyses, could create an incomplete view of the processes underlying its analyses and opinion. The order of analyses described does not represent the relative importance or weight given to those analyses by Dawson James.

In arriving at its fairness determination, Dawson James considered the results of all the analyses and did not attribute any particular weight to any factor or analysis considered by it; rather, Dawson James arrived at its opinion based on the results of all the analyses undertaken by it and assessed as a whole. Dawson James’ analyses are not necessarily indicative of actual values or actual future results that might be achieved, which values may be higher or lower than those indicated. Moreover, Dawson James’ analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be bought or sold. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before December 12, 2014, and is not necessarily indicative of current market conditions.

On December 15, 2014, Dawson James presented its oral opinion to Vaporin’s Board of Directors (which was confirmed in writing by delivery of Dawson James’s written opinion dated as of December 12, 2014), of the fairness, from a financial point of view, to Vaporin of the consideration to be issued by Vapor

63

in the merger pursuant to the merger agreement. The summary of the opinion in the joint proxy statement-prospectus is qualified in its entirety by reference to the summary of the written opinion, which is included as Appendix B to the joint proxy statement-prospectus and sets forth the procedures followed, assumptions made, qualifications and limitations on the review undertaken and other matters considered by Dawson James in preparing its opinion. In the section of the joint proxy statement-prospectus regarding Dawson James’s analyses or opinion, references to the “Transaction” relate solely to the consideration to be received by Vaporin shareholders in the merger.

The opinion was addressed to the Board of Directors of Vaporin for the use and benefit of the members of the Board (in their capacities as such) and, with the consent of the Board, the members of the Vapor Board of Directors (in their capacities as such) in connection, as applicable, the Board’s evaluation of the merger. Neither the opinion nor the summary of the opinion and related analyses set forth in the joint proxy statement-prospectus is intended to and they do not constitute advice or a recommendation to any of the shareholders of Vaporin or any other security holders as to how such holder should vote or act with respect to any matter relating to the merger or otherwise. Dawson James’s opinion should not be construed as creating any fiduciary duty on Dawson James’s part to Vaporin, any other party to the merger agreement, any security holder of Vaporin or such other party, any creditor of Vaporin or such other party, or any other person. Dawson James’s opinion was just one of the several factors the Vaporin Board of Directors took into account in making its determination to recommend that Vaporin approve the merger.

In connection with preparing its opinion, Dawson James performed a variety of financial analyses. The following is a summary of the material financial analyses performed by Dawson James in connection with the preparation of its opinion. It is not a complete description of all analyses underlying such opinion. The implied multiple ranges and implied value reference ranges indicated by Dawson James’s analyses are not necessarily indicative of actual values nor predictive of future results, which may be significantly more or less favorable than those suggested by such analyses. Much of the information used in, and accordingly the results of, Dawson James’s analyses are inherently subject to substantial uncertainty.

The following summary of the material financial analyses performed by Dawson James in connection with the preparation of its opinion includes information presented in tabular format. The tables alone do not constitute a complete description of these analyses. Considering the data in the tables below without considering the full narrative description of the analyses, as well as the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses Dawson James performed.

For purposes of its analyses, Dawson James reviewed a number of financial metrics, including the following:

•

Earnings Per Share — generally the amount fully burdened net income divided by outstanding common shares

​

•

EBITDA — generally the amount of the relevant company’s earnings before interest, taxes, depreciation and amortization for a specified time period.

​

•

Enterprise Value — generally the value as of a specified date of the relevant company’s outstanding equity securities (taking into account its options and other outstanding convertible securities) plus the value as of such date of its net debt (the value of its outstanding indebtedness, preferred stock and minority interests less the amount of cash on its balance sheet).

​

•

Ratio of either Price or Enterprise Value to Trailing Twelve Month Revenue — generally the ratio of either market value of the public shares or Enterprise Value to total Revenue (or Sales).

​

Unless the context indicates otherwise, (1) share prices for the selected companies used in the selected companies analysis described below were as of December 8, 2014, (2) the relevant values for the selected transactions analysis described below were calculated on an enterprise value basis based on the consideration proposed to be paid in the selected transactions, (3) estimates of future financial performance of Vaporin were based on projections supplied by Vaporin management, (4) estimates of future financial performance of Vapor were based on the Vapor Projections, and (5) estimates of financial performance for the selected companies listed below were based on publicly available research analyst estimates for those companies.

64

Based on the assumption that the Closing Financing pricing formula set forth in the Term Sheet, the discounted volume-weighted average closing price (VWAP) of Vapor common stock of  $1.44 for the 5-day trading period after the announcement of Vapor’s preliminary third quarter results (November 10, 2014 to November 14, 2014), Dawson James calculated an implied value of the merger consideration to Vaporin of $19,470,795.

Projected Value Based Upon Forecasted Earnings Per Share

Vaporin management’s financial forecast model contemplates opening 55 retail stores in 2015. As there are no earnings metrics within the universe of companies near to Vaporin’s size or stage, we used the industry average price to earnings ratio for the well-established players. This yields a 2015 price of  $9.02 per share. The limitation in this model is that the probability of achieving the revenue and earnings forecast is less than 100% the number of stores opening on a roll-out basis will be governed to a large degree by the ability of Vaporin to secure $10MM in funding at the beginning of 2015. We reviewed various revenue scenarios and determined a “most likely” scenario, to which we imputed a 50% discount to the price target as a result. This then reduced the stand-alone Vaporin forecasted $9.02 per share to $4.51 per share. Applying an industry P/E multiple of 22X resulted in an implied value of  $21,454,070.

Discounted Cash Flow Analysis

Dawson James performed a stand-alone discounted cash flow analyses of Vaporin using the Vaporin management financial forecast. In performing these analyses, Dawson James applied discount rates ranging from 10.00% to 20.00% and perpetuity growth rates of 2 – 5%. However, without any relevant company to date demonstrating a positive earnings history or positive EBITDA, it is uncertain whether the assumptions and discount rates tested in our model are appropriate. We also re-emphasize the probability risk of achieving the 2015 forecast as well as the out-year forecasts, which are highly dependent upon successful achievement of the 2015 forecast. Therefore, we concluded that a discounted cash flow model in this instance may yield value ranges which are skewed and possibly misinformative. With regard to EBITDA, we draw the same conclusion as it relates to the peer group universe. Therefore, we chose not to include discounted cash flow as a methodology to determine the implied valuation.

Selected Companies Analysis

Dawson James reviewed and compared certain financial information and public market multiples for to determine a matrix of public market multiples. Dawson James performed a selected public market multiples financial analysis against Vapor and Vaporin, using certain trading multiples, market metrics and other measures, in each case, Dawson James has selected based on its judgment. Dawson James analyzed relevant comparables as to products, distribution channels and financial performance. Dawson James reviewed publicly available information for the following public companies and calculated several relevant metrics. With regard to developing this comparative analysis, the e-cigarette/vaporizer public company universe presented industry unique challenges including but not limited to, relatively early stage (lack of maturity) of the size-relevant public companies which resulted in extreme or non-existent multiples, lack of equity analyst coverage and published revenue and earnings estimates, very limited historical data as a result of most companies being formed or merged into only in the last 2 – 3 years. The companies with historic financial data are the large conglomerate Tobacco companies whose multi-billion revenue base generally discounts their relevance in this analysis. The following are public companies which Dawson James included in this analysis:

E-Cigarette:

•

American Heritage International

​

•

Electronic Cigarettes International Group, Ltd.

​

•

Gilla, Inc.

​

•

Icon Vapor, Inc.

​

•

mCig, Inc. (E-cig only, no vaporizers)

​

65

•

Ramoil Management, Ltd.

​

•

Vapor Group, Inc.

​

•

Vapor Hub International, Inc.

​

Tobacco with E-Cigarette Division:

•

Altria Group, Inc.

​

•

Lorillard, Inc.

​

•

Phillip Morris International, Inc.

​

•

Reynolds American Inc.

​

•

Vector Group Ltd.

​

With regard to Vaporin’s near peer group, the e-cigarette companies did not demonstrate any consistency of market metrics. The only metric for which data existed for a majority of the group was Trailing Enterprise Value to Trailing Twelve Months Revenue. This data is clearly skewed by the extreme delta between the high and the low in the E-Cigarette public company universe. Therefore, Dawson James reviewed the same metric among tobacco companies with e-cigarette divisions.

•

2014: FIN Branding Group/Electronic Cigarettes

​

•

2014: Green Smoke, Inc./NuMark

​

•

2014: International Vapor Group/Vapor Corp.

​

•

2012: Blu Cigs/Lorillard

​

By this measure, Vaporin at 6.1X is on the higher end of the range, in part due to less than a full year of e-cig/vaporizer related revenue. Using Vaporin’s 2014 revenue forecast as a proxy for trailing twelve month revenue, and applying the median TEV/TTM Rev multiple from the tobacco company universe, Dawson James calculated an implied Vaporin value of  $16.57 million.

Selected Transactions Analysis

Dawson James analyzed certain information relating to the following selected transactions in the e-cigarette and vaporizer industry. Many companies similar to Vaporin are private, and although there have been a number of transactions, there is little or no public information on the particular financial circumstances or total financial consideration involved. Vaporin’s historical EV/Rev is 8X, which falls at the very high end of the range exemplified by this analysis. Here again, we believe this metric is distorted by the very low and very short history of revenue. The incompleteness of the dataset also challenges drawing any credible conclusion. With regard to this universe, we believe that Vapor’s attempted acquisition of International Vapor Group, Lorillard’s acquisition of Blu, the Green Smoke transaction and the most recent acquisition of Green Tree Syndicate represent a valid surrogate approach based on TTM sales.

66

 

In particular, Dawson James deemed these transactions as most relevant:

•

2014: FIN Branding Group/Electronic Cigarettes

​

•

2014: Green Smoke, Inc./NuMark

​

•

2014: International Vapor Group/Vapor Corp.

​

•

2012: Blu Cigs/Lorillard

​

The average TTM revenue multiple paid from these three transactions is 2.28X. According to a Focused Stock Trader report dated, March 5, 2014, recent acquisitions in the industry have been at an average EV/Sales multiple of 3.2x. This value comforts closely with average value we determined from our selected transaction model. Based upon this metric and using Vaporin’s 2014 revenue estimate, the implied value of Vaporin would be $7,556,433.

Since none of the target companies or transactions in the selected transactions have characteristics identical to Vaporin, Vapor or the proposed merger, an analysis of selected business transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the target companies in the selected transactions and other factors that could affect the respective acquisition values of the transactions reviewed.

2014 Financial Forecasts and Projections Exchanged

Vapor and Vaporin do not as a matter of course publicly disclose internal management budgets, forecasts or projections as to future financial performance due to the unpredictability of the underlying assumptions and estimates. However, in connection with their respective confirmatory due diligence, Vapor requested, and Vaporin’s management provided Vapor and its financial advisor with, certain non-public financial forecasts and projections prepared by Vaporin’s management, and Vaporin requested, and Vapor’s management provided Vaporin and its financial advisors with, certain non-public financial forecasts and projections prepared by Vapor’s management.

67

Set forth below is a summary of the material financial forecasts and projections that were provided by each party to the other party and to the parties’ respective the financial advisors:

Summary of Financial Forecasts and Projections Provided by Vaporin and Vapor
for the Year Ending December 31, 2014
(all amounts are approximate)

The financial forecasts and projections set forth above represent the projections prepared by Vaporin and delivered to Vapor and prepared by Vapor and delivered to Vaporin prior to the announcement of the merger. The forecasts and projections provided by each party to the other were contained in each party’s budget for 2014, each of which was prepared at approximately year-end 2013 for purposes of internal planning, and these forecasts and projections did not include any infrequent items of income or expense. At the time the financial forecasts and projections were prepared, they represented the best estimates and judgments of the management teams of Vaporin and Vapor, respectively, that prepared the forecasts and projections in good faith. These financial forecasts and projections cannot be considered to necessarily be predictive of actual future operating results, and no assurance can be given regarding future events. The financial forecasts and projections represent Vapor’s and Vaporin’s independent forecasts and projections. The financial forecasts and projections were not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information or published guidelines of the SEC regarding forward-looking statements and do not fully comply with generally accepted accounting principles in the United States (“GAAP”). In light of the foregoing, and considering that the Vapor and Vaporin special meetings will be held several months after the financial forecasts and projections were prepared, as well as the uncertainties inherent in any financial forecasts and projections, stockholders of Vapor and Vaporin are cautioned not to rely on these financial forecasts and projections as a predictor of future operating results or otherwise.

The estimates and assumptions underlying the financial forecasts and projections of Vaporin and Vapor involve assumptions and judgments with respect to, among other things, future economic, competitive, regulatory and financial market conditions and future business decisions. These estimates and assumptions may not be realized and are inherently subject to significant business, economic, competitive and regulatory uncertainties, including those risk factors detailed in the sections entitled “Risk Factors” beginning on page 21 and “Forward-Looking Statements” beginning on page 29, all of which are difficult to predict and many of which are beyond the control of Vaporin and Vapor and will be beyond the control of the combined company after the merger. Estimates or projections of the value of businesses or securities do not purport to be appraisals or to reflect the prices at which such businesses or securities might actually be sold. In addition, the financial forecasts and projections prepared by Vaporin and Vapor represent each company’s own evaluation of its future financial performance on a stand-alone basis, and without reference to transaction-related costs or benefits. Accordingly, actual results could vary materially from those presented in the financial forecasts and projections, and actual value or future results could be significantly more or less favorable than what is suggested by the forecasts and projections. The inclusion of these financial forecasts and projections should not be interpreted as an indication that Vaporin or Vapor considers this information as necessarily predictive of actual future results, and this information should not be relied on for that purpose. Vapor and its management did not participate in preparing, and do not express any view on, the Vaporin financial forecasts and projections set forth above, or the assumptions underlying such financial forecasts and projections. Vaporin and its management did not participate in preparing, and do not express any view on, the Vapor financial forecasts and projections set forth above, or the assumptions underlying such financial forecasts and projections.

68

The prospective financial information of Vaporin and Vapor included in this joint proxy statement-prospectus has been prepared by, and is the responsibility of, the management teams of Vaporin and Vapor, respectively. Neither Vaporin’s or Vapor’s auditors, nor any other independent registered public accounting firm, nor Vaporin’s or Vapor’s financial advisors have examined, compiled or performed any procedures with respect to these forecasts or projections, nor have they expressed any opinion or any other form of assurance on this information or its achievability.

Neither Vapor nor Vaporin intends to disclose publicly any update or other revision to these forecasts or projections to reflect circumstances existing since their preparation or to reflect the occurrence of unanticipated events or changes in general economic or industry conditions, even in the event that any or all of the underlying assumptions are shown to be in error.

Resale Considerations Regarding Vapor Common Stock

The shares of Vapor common stock that will be issued if the merger is consummated will have been registered under the Securities Act of 1933, as amended. These registered shares will be freely transferable, other than shares of Vapor common stock held by Vaporin stockholders who become affiliates of Vapor.

Accounting Treatment of the Merger

Vapor will account for the merger using the acquisition method under U.S. generally accepted accounting principles. Under the acquisition method of accounting, the tangible and identifiable intangible assets and liabilities of Vaporin will be recorded, as of completion of the merger, at their respective fair values. The excess of the purchase price over the net assets acquired will be recorded as goodwill to the extent not allocated to other identifiable intangible assets. Goodwill resulting from the merger will not be amortized, but will be reviewed for impairment at least annually.

Financial statements and reported results of operations of Vapor issued after completion of the merger will not be restated retroactively to reflect the historical financial position or results of operations of Vaporin.

Material Federal Income Tax Consequences of the Merger

The following discussion sets forth the material U.S. federal income tax consequences of the merger to U.S. holders (as defined below) of Vaporin common stock that exchange their shares of Vaporin common stock for shares of Vapor common stock in the merger.

The discussion set forth herein is based upon the Code, the regulations promulgated under the Code and court and administrative rulings and decisions, all as in effect on the date of this document. These laws may change, possibly with retroactive effect, and any change could affect the accuracy of the statements and conclusions set forth in this discussion.

This discussion does not address any tax consequences arising under the laws of any state, local or foreign jurisdiction, or under any U.S. federal laws other than those pertaining to income tax. You should consult with your own tax advisor as to the state, local or foreign tax consequences of the merger in your particular circumstances.

This discussion is addressed only to those Vaporin stockholders who hold their shares of Vaporin common stock as a capital asset within the meaning of Section 1221 of the Code. Further, this discussion does not address all aspects of U.S. federal income taxation that may be relevant to you in light of your particular circumstances or that may be applicable to you if you are subject to special treatment under the U.S. federal income tax laws, including if you are:

•

a financial institution;

​

•

a tax-exempt organization;

​

•

an S corporation or other pass-through entity (or an investor in an S corporation or other pass-through entity);

​

•

an insurance company;

​

69

•

a mutual fund;

​

•

a dealer or broker in stocks and securities, or currencies;

​

•

a trader in securities that elects mark-to-market treatment;

​

•

subject to the alternative minimum tax provisions of the Code;

​

•

a holder of Vaporin common stock that received Vaporin common stock through the exercise of an employee stock option, through a tax qualified retirement plan, or otherwise as compensation;

​

•

a person that is not a U.S. holder (as defined below);

​

•

a person that has a functional currency other than the U.S. dollar;

​

•

a holder of Vaporin common stock that holds Vaporin common stock as part of a hedge, straddle, constructive sale, conversion, or other integrated transaction; or

​

•

subject to tax under Code sections 877 or 877A as a U.S. expatriate.

​

Determining the actual tax consequences of the merger to you may be complex. They will depend on your specific situation and on factors that are not within our knowledge or control. You should consult with your own tax advisor as to the tax consequences of the merger in your particular circumstances, including the applicability and effect of the alternative minimum tax and any state, local, foreign or other tax laws and of changes in those laws.

For purposes of this discussion, the term “U.S. holder” means a beneficial owner of Vaporin common stock that is for U.S. federal income tax purposes (i) an individual citizen or tax resident of the United States, (ii) a corporation, or entity treated as a corporation, organized in or under the laws of the United States or any state thereof or the District of Columbia, (iii) a trust if  (a) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (b) such trust has made a valid election to be treated as a U.S. person for U.S. federal income tax purposes or (iv) an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source.

The U.S. federal income tax consequences to a partner in an entity or arrangement treated as a partnership for U.S. federal income tax purposes that holds Vaporin common stock generally will depend on the status of the partner and the activities of the partnership. Partners in a partnership holding Vaporin common stock should consult their own tax advisors.

Tax Consequences of the Merger

The merger will qualify as a reorganization within the meaning of Section 368(a) of the Code. Accordingly, subject to the limitations set forth above, upon exchanging your Vaporin common stock for Vapor common stock, you will not recognize gain (except to the extent of any cash which you may receive) or loss pursuant to Section 354(a) of the Code. The aggregate tax basis in the shares of Vapor common stock that you receive in the merger will, pursuant to Section 358(a), equal your aggregate adjusted tax basis in the Vaporin common stock you surrender reduced by the amount of any cash you receive but increased by any gain you may have recognized. Your holding period for the shares of Vapor common stock that you receive in the merger will, pursuant to Section 1223(1), include your holding period for the shares of Vaporin common stock that you surrender in the exchange. If you acquired different blocks of Vaporin common shares at different times or at different prices, the Vapor common stock you receive will, pursuant to Treasury Regulation Section 1.358-2, be allocated pro rata to each block of Vaporin common stock, and the basis and holding period of each block of Vapor common stock you receive will be determined on a block-for-block basis depending on the basis and holding period of the blocks of Vaporin common stock exchanged for such block of Vapor common stock. Gunster, Yoakley & Stewart, P.A., counsel to Vapor, and Nason, Yeager, Gerson, White & Lioce, P.A., counsel to Vaporin, have issued opinions as to the qualification as a tax-free reorganization to stockholders of Vapor and Vaporin described in the section of this joint proxy statement-prospectus captioned “Material Federal Income Tax Consequences of the Merger,” as a tax-free reorganization.

70

Appraisal Rights

Stockholders of a Delaware corporation have the rights, in limited circumstances to appraisal rights under the DGCL in connection with a merger or reorganization. Under the DGCL, holders of the Vaporin’s common stock who follow the procedures set forth in Section 262 of the DGCL, attached as Appendix D (“Section 262”), other than stockholders who vote in favor of the merger or who return proxy cards that do not specify how their shares should be voted, will be entitled to have their shares of the Vaporin common stock appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of such shares, exclusive of any element of value arising from the consummation of the merger, together with a fair rate of interest, if any, as determined by such court. Vapor stockholders are not entitled to appraisal rights in connection with the merger.

The following discussion is not a complete statement of the law pertaining to appraisal rights under the DGCL and is qualified in its entirety to the full text of Section 262. All references to Section 262 and in this summary to a “stockholder” are to record holders of Vaporin common stock as to which appraisal rights are asserted. If you have a beneficial interest in Vaporin common stock held of record in the name of another person, such as a nominee, you must act promptly to cause the record holder to follow properly the steps summarized below and in a timely manner to perfect your appraisal rights.

Under the DGCL, a stockholder of a corporation participating in certain major corporate transactions may, under varying circumstances, be entitled to appraisal rights, pursuant to which such stockholder may receive cash in the amount of the fair market value of the shares held by such stockholder in lieu of the consideration such stockholder would otherwise receive in the transaction. Under the DGCL, such appraisal rights are not available to (1) stockholders with respect to a merger conducted under Section 251(g) of the DGCL where a parent merges into a wholly owned direct or indirect subsidiary and no stockholder vote is required; or (2) stockholders with respect to a merger or consolidation by a corporation the shares of which are either listed on a national securities exchange or are held of record by more than 2,000 holders if such stockholders receive only shares of the surviving corporation, shares of any other corporation that are either listed on a national securities exchange or held of record by more than 2,000 holders, cash in lieu of fractional shares, or any combination of the foregoing. In the proposed merger, only Vaporin stockholders are entitled to seek appraisal rights.

Section 262 requires that where a merger agreement is to be submitted for adoption at a meeting of stockholders, the stockholders be notified that appraisal rights will be available not less than 20 days before the meeting to vote on the merger. A copy of Section 262 must be included with such notice. This joint proxy statement-prospectus constitutes Vaporin’s notice to its stockholders that appraisal rights are available in connection with the merger, in compliance with the requirements of Section 262.

If you wish to consider exercising your appraisal rights, you should carefully review the text of Section 262 contained in Appendix D to this joint proxy statement-prospectus. Failure to comply timely and properly with the requirements of Section 262 will result in the loss of your appraisal rights under the DGCL.

If you elect to demand appraisal of your shares of Vaporin common stock, you must deliver to Vaporin a written demand for appraisal of your shares of Vaporin common stock before the vote is taken to approve the proposal to approve the merger agreement, which must reasonably inform Vaporin of the identity of the holder of record of Vaporin common stock who intends to demand appraisal of his, her or its shares of common stock; and you must not vote or submit a proxy in favor of the proposal to approve the merger agreement.

If you fail to comply with either of these conditions and the merger is completed, you will have no appraisal rights with respect to your shares of Vaporin common stock. A holder of shares of Vaporin common stock wishing to exercise appraisal rights must hold of record the shares of Vaporin common stock on the date the written demand for appraisal is made and must continue to hold the shares of common stock of record through the effective time of the merger, because appraisal rights will be lost if the shares of common stock are exchanged prior to the effective time. Voting against or failing to vote for the proposal to approve the merger agreement by itself does not constitute a demand for appraisal within the meaning of Section 262. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of approval of the merger agreement, and it will constitute a waiver of the stockholder’s right of appraisal and will nullify any previously delivered written demand for appraisal.

71

Therefore, a Vaporin stockholder who submits a proxy and who wishes to exercise appraisal rights must either submit a proxy containing instructions to vote against the proposal to approve the merger agreement or abstain from voting on the proposal to adopt the merger agreement. The written demand for appraisal must be in addition to and separate from any proxy or vote on the proposal to approve the merger agreement.

All demands for appraisal should be addressed to Vaporin, Inc., 4400 Biscayne Blvd., Miami, Florida 33137; Attention: Corporate Secretary, and must be delivered before the vote is taken to approve the proposal to approve the merger agreement at the Vaporin special meeting, and should be executed by, or on behalf of, the record holder of the shares of Vaporin common stock. The demand must reasonably inform Vaporin of the identity of the stockholder and the intention of the stockholder to demand appraisal of his, her or its shares of Vaporin common stock.

To be effective, a demand for appraisal by a stockholder of Vaporin common stock must be made by, or in the name of, the registered stockholder, fully and correctly, as the stockholder’s name appears on the stockholder’s stock certificate(s) or in the transfer agent’s records, in the case of uncertificated shares. The demand cannot be made by the beneficial owner if he or she does not also hold the shares of Vaporin common stock of record. The beneficial holder must, in such cases, have the registered owner, such as a broker or other nominee, submit the required demand in respect of those shares of Vaporin common stock. If you hold your shares of Vaporin common stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker or the other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee.

If shares of Vaporin common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal should be made in that capacity. If the shares of Vaporin common stock are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand should be executed by or for all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner. A record owner, such as a broker, who holds shares of Vaporin common stock as a nominee for others, may exercise his or her right of appraisal with respect to the shares of Vaporin common stock held for one or more beneficial owners, while not exercising this right for other beneficial owners. In that case, the written demand should state the number of shares of Vaporin common stock as to which appraisal is sought. Where no number of shares of Vaporin common stock is expressly mentioned, the demand will be presumed to cover all shares of Vaporin common stock held in the name of the record owner.

Within 10 days after the effective time, the surviving corporation in the merger must give written notice that the reorganization has become effective to each of Vaporin’s stockholders who has properly filed a written demand for appraisal and who did not vote in favor of the proposal to approve the merger agreement. At any time within 60 days after the effective time, any Vaporin stockholder who has not commenced an appraisal proceeding or joined a proceeding as a named party may withdraw the demand and accept Vapor Corp. common stock as specified by the merger agreement for that stockholder’s shares of Vaporin common stock by delivering to the surviving corporation a written withdrawal of the demand for appraisal. However, any such attempt to withdraw the demand made more than 60 days after the effective time will require written approval of the surviving corporation. Unless the demand is properly withdrawn by the stockholder within 60 days after the effective date of the merger, no appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, with such approval conditioned upon such terms as the Court deems just. If the surviving corporation does not approve a request to withdraw a demand for appraisal when that approval is required, or if the Delaware Court of Chancery does not approve the dismissal of an appraisal proceeding, the stockholder will be entitled to receive only the appraised value determined in any such appraisal proceeding, which value could be less than, equal to or more than the consideration offered pursuant to the reorganization agreement.

72

Within 120 days after the effective time, but not thereafter, either the surviving corporation or any Vaporin stockholder who has complied with the requirements of Section 262 and is entitled to appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the shares of common stock held by all stockholders entitled to appraisal. Upon the filing of the petition by a stockholder, service of a copy of such petition shall be made upon the surviving corporation. Accordingly, the failure of a stockholder to file such a petition within the period specified could nullify the stockholder’s previous written demand for appraisal. In addition, within 120 days after the effective time, any stockholder who has properly filed a written demand for appraisal and who did not vote in favor of the reorganization agreement, upon written request, will be entitled to receive from the surviving corporation, a statement setting forth the aggregate number of shares of common stock not voted in favor of the reorganization agreement and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares. The statement must be mailed within 10 days after such written request has been received by the surviving corporation. A person who is the beneficial owner of shares of Vaporin common stock held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition or request from the surviving corporation for such statement.

If a petition for appraisal is duly filed by a stockholder and a copy of the petition is delivered to the surviving corporation, then the surviving corporation will be obligated, within 20 days after receiving service of a copy of the petition, to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all Vaporin stockholders who have demanded an appraisal of their shares of Vaporin common stock and with whom agreements as to the value of their shares of Vaporin common stock have not been reached. After notice to Vaporin stockholders who have demanded appraisal, if such notice is ordered by the Delaware Court of Chancery, the Delaware Court of Chancery is empowered to conduct a hearing upon the petition and to determine those stockholders who have complied with Section 262 and who have become entitled to the appraisal rights provided by Section 262. The Delaware Court of Chancery may require stockholders who have demanded payment for their shares of common stock to submit their stock certificates to the Register in Chancery for notation of the pendency of the appraisal proceedings; and if any Vaporin stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder.

After determination of the Vaporin stockholders entitled to appraisal of their shares of Vaporin common stock, the Delaware Court of Chancery will appraise the shares of Vaporin common stock, determining their fair value as of the effective time after taking into account all relevant factors exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value. When the value is determined, the Delaware Court of Chancery will direct the payment of such value upon surrender by those stockholders of the certificates representing their shares of Vaporin common stock. Unless the Delaware Court of Chancery, in its discretion, determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective time and the date of payment of the judgment.

Costs of the appraisal proceeding (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and imposed upon the surviving corporation and the stockholders participating in the appraisal proceeding by the Delaware Court of Chancery, as it deems equitable in the circumstances. Upon the application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts used in the appraisal proceeding, to be charged pro rata against the value of all shares of common stock entitled to appraisal. Any Vaporin stockholder who demanded appraisal rights will not, after the effective time, be entitled to vote shares of Vaporin common stock subject to that demand for any purpose or to receive payments of dividends or any other distribution with respect to those shares of Vaporin common stock, other than with respect to payment as of a record date prior to the effective time. However, if no petition for appraisal is filed within 120 days after the effective time, or if the stockholder

73

otherwise fails to perfect, successfully withdraws or loses such holder’s right to appraisal, then the right of that stockholder to appraisal will cease and that stockholder will be entitled to receive the consideration described in the merger agreement (without interest) for his, her or its shares of Vaporin common stock pursuant to the merger agreement.

In view of the complexity of Section 262 of the DGCL, Vaporin stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors.

74

THE MERGER AGREEMENT

The following is a summary of the material provisions of the merger agreement. The following description of the merger agreement is subject to, and qualified in its entirety by reference to, the merger agreement, which is attached to this proxy statement-prospectus as Appendix A and is incorporated by reference into this document. This summary may not contain all of the information about the merger agreement that may be important to you. We urge you to read the merger agreement carefully and in its entirety, as it is the legal document governing the merger.

General Description

The merger agreement provides for the merger of Vaporin with and into Vapor, with Vapor as the surviving entity. A closing under the merger agreement is to occur as soon as practicable (and in any event, within three business days) after the satisfaction or waiver of all conditions to closing. The merger agreement also provides that Vapor and Vaporin may agree on a different closing date. The merger will become effective at the time specified in a certificate of merger which Vapor and Vaporin will prepare and which Vapor will file with the Delaware Secretary of State.

Consideration

At the effective time of the merger, all issued and outstanding shares of Vaporin common will be converted into, and become the right to receive the number of shares of Vapor common stock such that the former Vaporin stockholders will collectively hold 45% of the issued and outstanding shares of Vapor common stock following consummation of the merger. Because the number of shares of Vapor common stock to be issued to Vaporin stockholders in the merger is based on the number of shares of Vapor common stock issued and outstanding immediately prior to the effective time of the merger, the exact number of shares of Vapor common stock that Vaporin stockholders will receive in the merger cannot be precisely determined until the closing date of the merger. However, assuming the number of shares of Vapor common stock issued and outstanding as of the date of the joint proxy statement-prospectus remains unchanged on the closing date, Vaporin stockholders would collectively receive approximately 13,591,549 shares of Vapor common stock upon consummation of the merger. No fractional shares of Vapor common stock will be issued. In lieu of fractional shares of Vapor common stock, each holder of Vaporin common stock who would be entitled to a fractional interest will instead receive one full share of Vapor common stock.

Assumption of Vaporin Stock Options, Warrants and RSUs

The merger agreement provides that the issued and outstanding stock options, warrants and RSUs of Vaporin, whether or not then vested or exercisable, will be assumed by Vapor, and such securities will be adjusted in accordance with the exchange ratio (estimated to be approximately 2.07), upon the closing of the merger.

Certificate of Incorporation and Bylaws

The Vapor Certificate of Incorporation and the Vapor Bylaws as in effect immediately prior to the completion of the merger will be the certificate of incorporation and bylaws of the surviving corporation.

Board of Directors

Pursuant to the terms of the merger agreement, Vapor is required to take all action to cause the Vapor Board immediately following the consummation of the merger to be comprised of  (x) three directors chosen by the Vapor Board of Directors (at least two of whom shall be independent for purposes of the Nasdaq listing rules) and (y) two directors chosen by the Vaporin Board or Directors (at least one of whom shall be independent for purposes of the Nasdaq listing rules), each to serve for a term expiring on the earlier of his or her death, resignation, removal or the next annual meeting of stockholders of Vapor and, despite the expiration of his or her term, until his or her successor has been elected and qualified or there is a decrease in the size of the Vapor Board of Directors. If at any time prior to the effective time of the merger, any such board designee becomes unable or unwilling to serve as a director of Vapor following consummation of the merger, then the party that designated such individual shall designate another individual to serve in such individual’s place.

75

Exchange of Shares

The exchange of Vaporin common stock for Vapor common stock will occur after consummation of the merger. As soon as practicable after the effective time of the merger, Island Capital Management, LLC will mail a letter of transmittal to each holder of Vaporin common stock at the effective time of the merger. This mailing will contain instructions on how to surrender Vaporin common stock represented in certificated or book-entry form in exchange for shares of Vapor common stock to be received by holders of Vaporin common stock in the merger pursuant to the terms of the merger agreement.

Notwithstanding the time of surrender of Vaporin common stock, each holder of Vaporin common stock at the effective time of the merger will be deemed a stockholder of Vapor for all purposes from the effective time of the merger, except that Vapor will withhold the payment of dividends to such holder until such holder effects the exchange of Vaporin common stock represented in certificated or book-entry form for Vapor common stock. Such holder of Vaporin common stock will receive any withheld dividends, without interest, upon effecting the share exchange.

If a certificate for Vaporin capital stock has been lost, stolen or destroyed, Island Capital Management, LLC will issue shares of Vapor common stock under the merger agreement upon receipt of an affidavit of that fact by the claimant and indemnity agreement and the posting of a bond in such amount as Vapor determines is reasonably required as indemnity. Each holder of Vaporin common stock at the effective time of the merger will be deemed a stockholder of Vapor for all purposes from the effective time of the merger, except that Vapor will withhold the payment of dividends to such holder until the exchange of certificates for Vapor common stock has occurred. Such holder of Vaporin capital stock will receive any withheld dividends, without interest, upon the occurrence of the exchange of certificates for Vapor common stock.

Representations and Warranties

The representations and warranties described below and included in the merger agreement were made only for purposes of the merger agreement and as of specific dates, are solely for the benefit of Vapor and Vaporin, may be subject to limitations, qualifications or exceptions agreed upon by the parties, including those included in confidential disclosures made for the purposes of, among other things, allocating contractual risk between Vapor and Vaporin rather than establishing matters as facts, and may be subject to standards of materiality that differ from those standards relevant to investors. You should not rely on the representations and warranties or any description thereof as characterizations of the actual state of facts or condition of Vapor, Vaporin or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the merger agreement, which subsequent information may or may not be fully reflected in public disclosures by Vapor or Vaporin. The representations and warranties and other provisions of the merger agreement should not be read alone, but instead should be read only in conjunction with the information provided elsewhere in this proxy statement-prospectus and in the documents incorporated by reference into this proxy statement-prospectus. See “Information Incorporated by Reference” on page 115.

The merger agreement contains customary representations and warranties of Vapor and Vaporin relating to their respective businesses. The representations and warranties in the merger agreement do not survive the effective time of the merger.

Each of Vapor and Vaporin has made representations and warranties regarding, among other things:

•

organization; standing and power; charter documents; minutes; subsidiaries;

​

•

capital structure;

​

•

authority, non-contravention, governmental consents;

​

•

the accuracy of financial information and of information contained in filings with the SEC;

​

•

Internal controls and Sarbanes-Oxley Act compliance;

​

•

fees payable to financial advisors;

​

•

the absence of changes or events since December 31, 2013 that may have a material adverse effect on the corporation making the representation and warranty;

​

76

•

pending or threatened legal proceedings and the absence of material litigation;

​

•

taxes and tax returns;

​

•

the vote required for each of Vapor’s and Vaporin’s stockholder meetings;

​

•

compliance with applicable laws;

​

•

environmental matters;

​

•

the filing of required SEC documents and other material reports with governmental agencies and the adequacy and maintenance of internal and disclosure controls;

​

•

the enforceability and status of certain material contracts;

​

•

the absence of unlawful payments to third parties;

​

•

compliance with anti-money laundering laws and anti-terrorism laws; and

​

•

that either party did not make any untrue statement of a material fact or failure to disclose a material fact to the other party.

​

•

properties and insurance;

​

•

intellectual property matters;

​

•

employee benefit plans and compliance with employee benefit laws and regulations;

​

•

excess parachute payments;

​

•

the taking of actions to exempt the merger from anti-takeover provisions in state law and the certificate of incorporation; and

​

•

the absence of any circumstance that would prevent the merger from being classified as a tax-free reorganization.

​

Certain representations and warranties of Vapor and Vaporin are qualified as to “materiality” or “material adverse effect.” For purposes of the merger agreement, a “material adverse effect,” when used in reference to Vapor or Vaporin, means any effect which (i) is material and adverse to the business, assets, financial condition or results of operations of such party and its subsidiaries on a consolidated basis, or (ii) materially impairs the ability of such party and its subsidiaries to consummate the transactions contemplated by the merger agreement on a timely basis; provided, however, that “material adverse effect” will not be deemed to include the impact of:

•

changes generally affecting the economy, financial or securities markets;

​

•

the announcement of the transactions contemplated by the merger agreement;

​

•

any outbreak or escalation of war or any act of terrorism; or

​

•

general conditions in the industry in which the parties and their respective subsidiaries operate.

​

Covenants and Agreements

Each of Vapor and Vaporin has undertaken customary covenants that place restrictions on it and its subsidiaries until the completion of the merger. Each of Vapor and Vaporin has agreed to carry on its business in the ordinary course consistent with past practice and cause their respective significant subsidiaries to do the same. Each of Vapor and Vaporin will use commercially reasonable efforts to preserve intact its business organization and that of its significant subsidiaries, as well as maintain its rights, franchises and existing relations with customers, suppliers and employees.

77

In addition to the general covenants above, the parties further agreed that, except as otherwise approved by the other party in writing, such party will not:

•

change any provision of its certificate of incorporation, bylaws or similar governing documents;

​

•

except as may be required to maintain the listing of Vapor’s common stock on Nasdaq, change the number of shares of its authorized or issued capital stock (other than in connection with the exercise of stock options, warrants grants of restricted stock or other equity awards or upon the conversion of convertible debt outstanding as of the date of the merger agreement);

​

•

issue or grant any option, warrant, call, commitment, subscription, right to purchase or agreement of any character relating to the authorized or issued capital stock of such party or any subsidiary or any securities convertible into shares of such stock, or split, combine or reclassify any shares of its capital stock (other than in connection with the exercise of stock options, warrants grants of restricted stock or other equity awards or upon the conversion of convertible debt outstanding as of the date of the merger agreement), or redeem or otherwise acquire any shares of such capital stock, or declare, set aside or pay any dividend, or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;

​

•

increase compensation payable to directors, officers and employees, other than increases in compensation made in the ordinary course of business consistent with past practices, enter into any new or materially amend any existing employment agreements, or establish or adopt any benefit plans;

​

•

acquire, by merger or acquisition, any business or person or make any loans or advances or capital contributions to or investments in any person in excess of  $25,000;

​

•

transfer, license, sell, lease or otherwise dispose of any assets except in the ordinary course of business;

​

•

repurchase, prepay or incur indebtedness for borrowed money or guarantee such indebtedness of another person;

​

•

enter into or amend or modify in any material respect, or consent to the termination of) and material contract or lease;

​

•

settle any claim, action or proceeding or other liability for money damages in an amount in excess of  $100,000 or involving any material restriction on such party or its subsidiaries;

​

•

make any material change in its accounting methods or practices not required by GAAP or applicable requirements;

​

•

settle or compromise and material tax claim, audit or assessment, change any tax elections or methodologies, or amend any tax return;

​

•

enter into any material agreement, letter of intent or similar agreement with respect to any joint venture or strategic alliance;

​

•

except as permitted in the merger agreement, take any action to exempt any person from the application of Section 16 of the Exchange Act;

​

•

abandon, encumber, exclusively license or otherwise dispose of any intellectual property other than in the ordinary course of business; or

​

•

agree or commit to do any of the foregoing.

​

The merger agreement also contains covenants by each party to furnish current information to the other party, for each party to duly call and hold a meeting of their respective stockholders to approve the merger agreement and the merger, and to ratify the Bridge Financing, in the case of Vapor.

78

The merger agreement further contains mutual covenants relating to:

•

access to properties and records of the other party to the merger agreement;

​

•

prohibitions on solicitations of other competing offers;

​

•

the preparation and filing of this joint proxy statement-prospectus with the SEC;

​

•

public announcements with respect to the transactions contemplated by the merger agreement;

​

•

the treatment of the merger as a tax-free reorganization; and

​

•

stockholder litigation; and

​

•

the disposition of shares of Vaporin common stock, restricted stock or stock options in connection with the consummation of the merger being exempt under Rule 16b-3 promulgated under the Exchange Act.

​

Vapor has also agreed that, for a period of six years following the closing date of the merger, it will indemnify, defend and hold harmless each officer and director of Vaporin and its subsidiaries against losses arising from such person’s status as an officer or director of Vaporin or any of its subsidiaries prior to the effective time of the merger. Vapor has also agreed to cover such directors and officers under Vapor’s existing directors’ and officers’ insurance policy or obtain a six-year “tail” policy, in each case with coverages not less advantageous as Vaporin’s existing policy, provided, however, that Vapor will not be required to pay more than 200% of Vaporin’s current premium for such insurance.

Employment and Director Matters

Pursuant to the terms of the merger agreement, Vapor is required to take all action to cause the Vapor Board immediately following the consummation of the merger to be comprised of  (x) three directors chosen by the Vapor Board of Directors (at least two of whom shall be independent for purposes of the Nasdaq listing rules) and (y) two directors chosen by the Vaporin Board or Directors (at least one of whom shall be independent for purposes of the Nasdaq listing rules), each to serve for a term expiring on the earlier of his or her death, resignation, removal or the next annual meeting of stockholders of Vapor and, despite the expiration of his or her term, until his or her successor has been elected and qualified or there is a decrease in the size of the Vapor Board of Directors. If at any time prior to the effective time of the merger, any such board designee becomes unable or unwilling to serve as a director of Vapor following consummation of the merger, then the party that designated such individual shall designate another individual to serve in such individual’s place.

Vapor has also agreed to provide to Vaporin employees who remain employed immediately after the effective time of the merger with salary and benefits similar to the salary and benefits previously provided to each such employee by Vaporin.

Agreement Not to Solicit Other Offers

Each of the parties has agreed that it and its subsidiaries will not, and it and its subsidiaries will use their best efforts to cause their respective representatives not to:

•

initiate, solicit, or knowingly encourage or facilitate (including by way of providing information) any inquiries or proposals with respect to any “Takeover Proposal” (as defined below); or

​

•

have any discussions with or provide any confidential or nonpublic information or data to any person relating to an Takeover Proposal, or engage in any negotiations concerning an Takeover Proposal.

​

79

However, if a party receives an unsolicited bona fide Acquisition Proposal after the date of the merger agreement, such party may provide nonpublic information to, or engage in negotiations or discussions with, the person making the acquisition proposal if and only to the extent that:

•

approval of the merger agreement by such party’s stockholders has not yet been obtained;

​

•

the party’s Board of Directors concludes in good faith, after consulting with its financial advisor, that such Takeover Proposal constitutes or is reasonably likely to result in a Superior Proposal (as defined below);

​

•

the party’s Board of Directors concludes in good faith, after considering the advice of its outside counsel, that failure to take such actions would be inconsistent with its fiduciary duties under applicable law;

​

•

prior to providing any nonpublic information, the party enters into a confidentiality agreement with the person making the Takeover Proposal on terms no less favorable to such party than those specified in the confidentiality agreement between such party and the other party; and

​

•

the concurrently provides to the other party any non-public information concerning such or its subsidiaries provided to the party making the Takeover Proposal which was not previously provided to such other party.

​

Each party’s Board of Directors also has agreed not to (i) withdraw (or modify or qualify in any manner adverse to the other party) or refuse to recommend that the stockholders approve the merger agreement at the stockholders’ meeting; (ii) adopt, approve, recommend, endorse or otherwise declare advisable the adoption of any Takeover Proposal; or (iii) cause or permit such party or any of its subsidiaries to enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement or other agreement constituting or related to, or which is intended to or is reasonably likely to lead to, any Takeover Proposal (other than a confidentiality agreement permitted under the merger agreement). However, prior to the date of the applicable party’s stockholders’ meeting, such party’s Board of Directors may take the actions specified in the immediately preceding sentence if, after the fifth (5th) business day following the other party’s receipt of a written notice of a Superior Proposal (which shall (i) state that the Board of Directors has determined that such bona fide unsolicited written Takeover Proposal constitutes a Superior Proposal, (ii) specify the materials terms and conditions of, and identity of party making, such Superior Proposal, and (iii) contain a copy of any specific transaction agreements with such party), the Board of Directors has reasonably determined in good faith, after consultation with its financial and legal advisors, that the failure to take such actions would be reasonably likely to be inconsistent with its fiduciary duties and that such Takeover Proposal is a Superior Proposal that has not been withdrawn and continues to be a Superior Proposal after taking into account all adjustments to the terms of the merger agreement that are committed to in writing by the other party.

In connection with any Takeover Proposal, each party has agreed to:

•

immediately cease and terminate any activities, discussions or negotiations before the date of the merger agreement with any persons other than the other party with respect to any Takeover Proposal;

​

•

not terminate, waive, amend, release or modify any confidentiality or standstill agreement relating to any Takeover Proposal;

​

•

use its commercially reasonable efforts to enforce any confidentiality or similar agreement relating to any Takeover Proposal;

​

•

advise the other party promptly (within 24 hours) following receipt of any Takeover Proposal or any request for non-public information or to engage in negotiations that the party’s directors reasonably believe is reasonably likely to lead to or that contemplates an Acquisition Proposal of the existence of such Takeover Proposal or request, describing the material terms and conditions thereof  (including the identity of the person making such Takeover Proposal or request);

​

80

•

keep the other party reasonably well informed in all material respects of the status (including after the occurrence of any material amendment or modification) of any such Takeover Proposal or request; and

​

•

notify the other party promptly at least 48 hours in advance of any board meeting at which any Takeover Proposal is expected to be considered.

​

As used in the merger agreement, “Takeover Proposal” means other than the transactions contemplated by the merger agreement, a tender or exchange offer to acquire 15% or more of the voting power in such party or any of its subsidiaries, a proposal for a merger, consolidation, or other business combination involving such party or any of its subsidiaries or any other proposal or offer to acquire in any manner 15% or more of the voting power in, or 15% or more of the business or assets of such party or any of its subsidiaries.

As used in the merger agreement, “Superior Proposal” means an unsolicited bona fide written Takeover Proposal that a party’s Board of Directors concludes in good faith to be more favorable from a financial point of view to its stockholders than the transactions contemplated by the merger agreement (including taking into account any adjustment to the terms and conditions proposed by the other party in response to such proposal), (1) after receiving the advice of its financial advisor, (2) after taking into account the likelihood of consummation of such transaction on the terms set forth in the Takeover Proposal (as compared to the terms in the merger agreement), and (3) after taking into account all legal (with the advice of outside counsel), financial (including the financing terms of any such proposal) and other aspects of such proposal and any other relevant factors permitted under applicable law.

Costs and Expenses

In general, each of Vapor and Vaporin will be responsible for all costs and expenses incurred by it in connection with the negotiation and completion of the transactions contemplated by the merger agreement. However, the costs and expenses of printing and mailing this joint proxy statement-prospectus will be borne equally by Vapor and Vaporin if the merger is terminated.

Indemnification and Insurance

For a period of six years following the effective time of the merger, Vapor has agreed to indemnify, defend and hold harmless all past and present officers and directors, and any person who becomes prior to the effective time of the merger a director or officer, of Vaporin and its subsidiaries in their capacities as such against all claims, damages, liabilities, losses, costs, charges, expenses, judgments, fines, penalties and amounts paid in settlement to the fullest extent such persons would be entitled to such indemnification under any applicable law and the articles of incorporation and bylaws of Vaporin (or charter documents of the applicable Vaporin subsidiary) as in effect on the date of the merger agreement.

The merger agreement further provides that Vapor will cause the officers and directors of Vaporin and its subsidiaries to be covered for a period of six years after the effective time of the merger under an extension of Vaporin’s existing directors’ and officers’ liability insurance policy, provided, however, that Vapor is only required to obtain such coverage at an aggregate cost not to exceed 200% of the annual premium currently paid by Vaporin for such coverage.

Conditions to Complete the Merger

The obligation of each party to consummate the merger is subject to satisfaction or waiver of certain conditions, including:

•

approval of the merger agreement by the stockholders of both Vaporin and Vapor and approval of the issuance of Vapor common stock by the stockholders of Vapor;

​

•

receipt of all necessary consents, approvals and authorizations necessary to consummate the merger from federal and state government authorities;

​

•

absence of any governmental action, third party suit or other proceeding that would prevent the consummation of the merger or make in inadvisable to proceed with the merger;

​

81

•

the Vapor common stock to be issued in the merger being approved for listing on the Nasdaq Stock Market LLC;

​

•

the registration statement covering the shares of Vapor common stock to be issued in the merger has been declared effective by the SEC; and

​

•

No suits or proceedings against a party that would have the effect of preventing completion of the merger and no proceedings by a governmental entity seeking to restrain or prohibit the merger.

​

•

The obligation of Vapor to consummate the merger is also conditioned on, among other things:

​

•

continued accuracy of the representations and warranties of Vaporin contained in the merger agreement, subject to a material adverse effect standard;

​

•

performance by Vaporin, in all material respects, of its obligations under the merger agreement;

​

•

the absence of any material adverse effect with respect to Vaporin;

​

•

consummation of an equity financing of at least $3.5 million (see page 44 for a description of this offering); and

​

•

Vapor shall have received financing commitments of up to $25 million subject to certain conditions relating to Vapor.

​

The obligation of Vaporin to consummate the merger is also conditioned on, among other things:

•

continued accuracy of the representations and warranties of Vapor contained in the merger agreement, subject to a material adverse effect standard; and

​

•

performance by Vapor, in all material respects, of its obligations under the merger agreement.

​

Termination

Vapor and Vaporin may terminate the merger agreement by mutual written consent at any time.

Either Vapor or Vaporin may terminate the merger agreement for certain reasons, including the following:

•

the merger has not been completed by the End Date, provided that the failure to close was not the result of such party’s material breach of a representation, warranty, covenant or agreement;

​

•

the approval of any government entity needed to complete the merger and the other transactions contemplated by the merger agreement has been denied by final non-appealable action by such governmental entity, provided that the failure to receive such approval was not the result of such party’s failure to comply with the merger agreement;

​

•

Vaporin’s stockholders fail to approve the merger agreement at the meeting of the stockholders (or any adjournment or postponement thereof) or Vapor stockholders fail to approve the issuance of Vapor stock at the meeting of stockholders (or any adjournment or postponement thereof);

​

•

a party receives a Superior Proposal and enters into an acquisition agreement with respect to the Superior Proposal in compliance with the terms of the merger agreement;

​

•

a party withdraws, modifies or qualifies (in any adverse manner) its recommendation its recommendation to stockholders in favor of the merger or issuance of the shares in connection with the merger, as applicable, based on advice from counsel that the failure to do so would cause that party’s Board of Directors to breach its fiduciary duties; or

​

•

a party breaches the merger agreement and such breach is incapable of being cured by the End Date.

​

Termination Fees and Termination Expenses

In the event that a Takeover Proposal, or an intention to make a Takeover Proposal, to acquire the business or assets of either party or any of its subsidiaries shall have been made directly to such party stockholders or otherwise publicly disclosed or communicated or made known to senior management of such party’s Board of Directors and the merger agreement is thereafter terminated:

82

•

by the party that received such Takeover Proposal (the “Takeover Party”) as a result of the Takeover Party’s entry into an agreement in respect of a Superior Proposal;

​

•

by either Vapor or Vaporin because the merger shall not have been consummated on or before the End Date or the Takeover Party’s stockholders failed to approve the merger agreement at the meeting of the stockholders and the Takeover Party subsequently enters into a material agreement in respect of a Takeover Proposal (changing references in the definition of such term from 15% to 50%) within 12 months after the termination of the merger agreement; or

​

•

by either Vapor or Vaporin because the other party shall have breached any representation, warranty, covenant or agreement contained in the merger agreement and such breach would entitle the other party to terminate the merger agreement;

​

•

then, the terminating party will be required to pay the non-terminating party’s reasonable out of pocket expenses, and a termination fee of  $0.5 million.

​

83

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Background on the Proposed Merger

Vaporin, Inc. Reverse Acquisition

On January 24, 2014, Vaporin entered into a Share Exchange Agreement (the “Exchange Agreement”) with Vaporin Florida, Inc., a Florida corporation (“Vaporin Florida”), and the stockholders and debt holders of Vaporin Florida. Upon closing of the transaction contemplated under the Exchange Agreement (the “Share Exchange”), on January 24, 2014, the holders of Vaporin Florida’s outstanding common stock transferred all of the issued and outstanding common stock of Vaporin Florida to Vaporin in exchange for an aggregate of 35 million shares of Vaporin’s common stock. The Share Exchange was accounted for as a reverse acquisition and re-capitalization. Vaporin Florida was the acquirer for financial reporting purposes and Vaporin was the acquired company. Consequently, the historical financial statements prior to the Share Exchange are those of Vaporin Florida and the consolidated financial statements after completion of the Share Exchange included the assets and liabilities of both Vaporin and Vaporin Florida.

Additional information relating to the Exchange Agreement can be found elsewhere in this joint proxy statement-prospectus. The unaudited historical condensed statement of operations for the year ended December 31, 2013 of Vaporin included in this unaudited pro forma were derived from the historical financial statements of Vaporin Florida.

Vaporin, Inc. Acquisition of The Vape Store, Inc.

Effective August 29, 2014 (the “Closing”), Vaporin, Vaporin Acquisitions, Inc., a Florida corporation and wholly owned subsidiary of Vaporin (the “Merger Sub”), The Vape Store and Steve and Christy Cantrell, holders of all outstanding Vape Store shares (the “Cantrells”) entered into and closed an Agreement and Plan of Merger (the “Merger Agreement”). Pursuant to the Merger Agreement, Vape Store merged with and into Merger Sub (the “Merger”), with Merger Sub continuing as the surviving corporation and a wholly owned subsidiary Vaporin.

Additional information relating to the acquisition of Vape Store can be found elsewhere in this joint proxy statement-prospectus. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2014 and for the year ended December 31, 2013 include adjustments to reflect the results of operations of Vape Store as if the acquisition had occurred on January 1, 2013.

Vapor Corp. Proposed Merger with Vaporin, Inc.

As disclosed elsewhere in this joint proxy statement-prospectus, on November 6, 2014, Vapor Corp. entered into a binding term sheet related to a proposed merger with Vaporin, Inc. (the “merger”) and financing transactions with certain other third parties, including $3.5 million in equity financing subject to the closing of the merger and up to an additional $25 million in financing based on the combined entity’s ability to achieve certain financial performance metrics. The unaudited pro forma condensed combined balance sheet gives effect to the proposed merger as if it had occurred on September 30, 2014. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2014 and for the year ended December 31, 2013 give effect to the merger as if it occurred on January 1, 2013.

Basis of Presentation

The historical consolidated financial information has been adjusted in the unaudited pro forma condensed combined financial statements to give effect to pro forma events that are (1) directly attributable to the merger, (2) factually supportable, and (3) expected to have a continuing impact on the combined results of Vapor and Vaporin. These unaudited pro forma condensed combined financial statements do not give effect to anticipated synergies, integration costs or nonrecurring transaction costs which result directly from the merger. The unaudited pro forma condensed combined financial statements also do not contemplate any additional debt that Vapor may elect to incur in the future, which could result in interest expense that is different from what is reflected in these unaudited pro forma condensed combined financial

84

statements. Further, because the tax rate used for these unaudited pro forma condensed combined financial statements is an estimated statutory tax rate, it will likely vary from the actual effective rate in periods subsequent to completion of the transactions, and no adjustment has been made to the unaudited pro forma condensed combined financial information as it relates to limitations on the ability to utilize deferred tax assets, such as those related to net operating losses and tax credit carryforwards, as a result of the transaction.

The following unaudited pro forma condensed combined financial statements give effect to the merger under the acquisition method of accounting in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Topic 805, Business Combinations (“ASC 805”). Based on the terms of the merger, Vapor has concluded that it is to be treated as the accounting acquirer for various reasons, including but not limited to, as a change in control is not expected to occur as the executive officers of Vapor will continue on as the executive officers of the combined entity and a significant change to the structure of the board of directors is not expected to occur. As of the date of this joint proxy statement-prospectus, Vapor has not completed the detailed valuation work necessary to arrive at the required estimates of the fair value of the Vaporin assets to be acquired and the liabilities to be assumed and the related allocation of purchase price, nor has it identified all adjustments necessary to conform Vaporin’s accounting policies to Vapor’s accounting policies. Accordingly, the accompanying purchase price allocation is preliminary and is subject to further adjustments upon closing of the merger. Differences between these preliminary estimates and the final purchase price allocation amounts will occur and these differences could have a material impact on the accompanying unaudited pro forma condensed combined financial statements.

These unaudited pro forma condensed combined financial statements are for informational purposes only. It does not purport to indicate the results that would actually have been obtained had the merger been completed on the assumed date or for the periods presented, or which may be realized in the future. A final determination of the fair value of Vaporin’s assets and liabilities will be based on the actual net tangible and intangible assets and liabilities of Vaporin that exist as of the date of closing of the merger and, therefore, cannot be made prior to that date. Additionally, the value of the merger consideration consisting of shares of Vapor common stock will be determined based on the trading price of Vapor common stock at the time of the closing of the merger.

The unaudited pro forma condensed combined financial statements should be read in conjunction with the accompanying notes to the unaudited pro forma condensed combined financial statements, the audited historical consolidated financial statements and accompanying notes of Vapor and Vaporin, which have been incorporated by reference or included in this joint proxy statement-prospectus, respectively, as well as other information contained or incorporated by reference into this joint proxy statement-prospectus.

85

Unaudited Pro Forma Condensed Combined Balance Sheet September 30, 2014