UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): May 15, 2015
VAPOR
CORP.
(Exact
name of registrant as specified in its charter)
Delaware |
|
001-36469 |
|
84-1070932 |
(State
or Other Jurisdiction |
|
(Commission |
|
(I.R.S.
Employer |
of
Incorporation) |
|
File
Number) |
|
Identification
No.) |
3001
Griffin Road
Dania
Beach, Florida 33312
(Address
of Principal Executive Office) (Zip Code)
(888)
766-5351
(Registrant’s
telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
2.02. Results of Operations and Financial Condition
On
May 15, 2015, Vapor Corp. (the “Company”) issued a press release announcing the results of operations for the Company
for the three months ended March 31, 2015. A copy of such press release is furnished as Exhibit 99.1 to this report.
The
information in Item 2.02 of this report, including the information in the press release attached as Exhibit 99.1 to this report,
is furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for the purposes of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. Furthermore, the information in Item
2.02 of this report, including the information in the press release attached as Exhibit 99.1 to this report, shall not be deemed
to be incorporated by reference in the filings of the registrant under the Securities Act of 1933.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits.
Exhibit
No. |
Exhibit |
|
|
99. 1 |
Press release dated
May 15, 2015 |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
|
VAPOR CORP. |
|
|
|
Date:
May 15, 2015 |
By:
|
/s/
James Martin |
|
Name:
|
James
Martin |
|
Title:
|
Chief
Financial Officer |
Vapor Corp. Reports First Quarter 2015 Results
DANIA
BEACH, Fla. – May 15, 2015 – Vapor Corp. (NASDAQ CM: VPCO) (“Vapor” or the “Company”),
a leading U.S.-based distributor and retailer of vaporizers, e-liquids, e-cigarettes and e-hookahs, today announced its financial
and operating results for the first quarter ended March 31, 2015.
“Since
completing our acquisition of Vaporin in early March, we have worked diligently to strengthen our management team, streamline
our supply chain, redefine our marketing strategies and fortify our brick-and-mortar retail presence. While we are excited by
the progress thus far, it is important to note that the financial results for the first quarter of 2015 do not fully reflect the
expected operational and financial contributions of Vaporin, nor the strength of the combined business. As we progress through
2015, we look forward to demonstrating markedly improved operating and financial results,” noted Jeffrey Holman, Chief Executive
Officer of Vapor Corp.
First
Quarter 2015 Financial Highlights
Vapor Corp.
completed its merger with Vaporin on March 4, 2015. Due to the timing of the merger’s closing, the results for the first
quarter do not reflect the full financial period for Vaporin and do not reflect the full impact of the Company’s strategic
corporate restructuring currently being implemented.
The Company
experienced a decline in sales for the first quarter of 2015 on a year over year basis from 2014. This is primarily due to a shift
in the Company’s wholesale strategy that focuses more squarely on limiting sales to retailers with higher and faster sell-through
capabilities. This change is part of a broader go-to-market strategy and evolving product mix that focuses on vaporizers, which
is in line with current market trends. Given the timing of these changes and the acquisition of Vaporin, first quarter results
do not reflect the benefits of the changes occurring within the Company. In addition, insofar as the acquisition of Vaporin was
consummated towards the end of the quarter, revenue that will appear in the second quarter from the Company’s 10 “The
Vape Stores”, as well as from other revenue streams, was not fully realized in the first quarter earnings. Net sales for
the quarter ended March 31, 2015 were approximately $1.47 million compared with approximately $4.79 million during the same period
last year.
Net loss
for the quarter ended March 31, 2015 was $3.98 million compared with a net loss of $1.45 million for the quarter ended March 31,
2014. This increase is a result of the decline in revenue, e-cig product returns that led to liquidating certain inventory, and
costs associated with a new go-to-market strategy currently being implemented. The Company’s management team believes that
the majority of returns and write downs on ecig product have occurred, and that the new go-to-market strategy has allowed it to
move beyond the factors that impacted the financial results for the first quarter of 2015. As a result, management is now focused
on future growth.
First
Quarter 2015 Business Highlights
|
● |
Added
several new members to the Company’s management team and board of directors, including President and Director Gregory
Brauser, Chief Financial Officer James Martin and new Board Member Dan MacLachlan; |
|
|
|
|
● |
Recently
opened four new “The Vape Store” retail locations which added to the six Vapor acquired in the Vaporin merger,
with plans to open at least an additional 10 locations by the end of 2015; |
|
|
|
|
● |
Demonstrated
a commitment to the responsible use of vaporizers and accompanying substances, including the prevention of use by minors with
patent-pending locking systems, including: |
|
● |
A
biometric fingerprint locking system, which will be available in the summer of 2015; and |
|
|
|
|
● |
The
first-ever Mechanical Vaping Lock (MVL) |
|
● |
Completed
the merger with Vaporin, a leading distributor and marketer of vaporizers, tanks, mods and e-liquid products. The Company
expects to leverage resources acquired from the merger to fuel its retail expansion
strategy, which will allow it to capitalize on the growing market trend of customers who are purchasing vaporizer products in
dedicated retail Vape Stores. |
Growth
Strategy
Vapor Corp.’s
VaporX® brand of vaporizers, e-liquids and accessories pioneered the industry and the Company continues to develop
new technologies to enhance the consumer’s experience. The Company has since broadened its line of products with the addition
of Vaporin’s higher-end vaporizers, tanks and mods. The Company believes that focusing more of its resources on strategically
growing sales for its lines of vaporizer products will be a key driver for growth.
From a go-to-market
strategy, Vapor Corp. has been an early adopter of the market shift by customers towards purchasing vaporizers and accessories
at specialized vape shops. In order to increase its market position, Vapor Corp. has already started to expand upon its proprietary
retail strategy, which consists of 10 “The Vape Store” locations. The Company is poised to have a total of 20-plus
branded retail vape stores open before the end of fiscal 2015, with a long-term goal to have its stores become the first national
vaporizer retailer over the next few years. This strategy capitalizes on a shift in customers’ buying habits away from traditional
retailers and towards specialty vaporizer retail locations. The “vape shop” retail channel has quickly become a nearly
$1.2 billion segment, comprising roughly 60% of the $2 billion vaporizer portion of the $3.5 billion vaping market.
The Company
will soon launch a more robust e-commerce platform that will support its brands and retail initiatives.
About
Vapor Corp.
Vapor Corp.,
a NASDAQ company, is a U.S. based distributor and retailer of vaporizers, e-liquids and electronic cigarettes. It is presently
the only vaporizer company listed on a major stock exchange (NASDAQ Symbol: VPCO) and recently acquired the retail store chain
“The Vape Store” as part of a merger with Vaporin, Inc. The Company’s innovative technology enables users to
inhale nicotine vapor without smoke, tar, ash or carbon monoxide. Vapor Corp. has a streamlined supply chain, marketing strategies
and wide distribution capabilities to deliver its products. The Company’s brands include Krave®, VaporX®, Hookah
Stix® and VaporinTM and are distributed to and available at approximately 50,000 retail stores throughout the U.S.
and Canada. The Company sells direct to consumer via Company-owned brick-and-mortar retail locations operating under “The
Vape Store” brand and via e-commerce.
Safe
Harbor Statement
This press
release contains certain forward-looking statements that are made pursuant to the Private Securities Litigation Reform Act of
1995, including but not limited to those regarding our expected growth resulting from the Vaporin merger and change in strategy,
our improved operational and financial results, our plans for retail vape stores and the expected growth and our launching of
a more robust e-commerce platform. Words such as “expects,” “anticipates,” “plans,” “believes,”
“scheduled,” “estimates” and variations of these words and similar expressions are intended to identify
forward-looking statements. Such forward-looking statements involve certain risks and uncertainties. Actual results may differ
materially from such forward-looking statements. Factors that may cause actual results to differ from those contemplated by such
forward-looking statements include, but are not limited to, the following: our inability to enter into the financing transactions
to provide working capital, the conditions of the capital markets for companies like us; the inability to realize expected cost
savings and synergies from the merger of Vapor with Vaporin in the amounts or in the timeframe anticipated; Vapor’s ability
to successfully execute its current business strategy;; the inability to retain Vapor’s and Vaporin’s customers and
employees; the impact of future federal, state and local regulations; or a decline in the economy, as well as the risk factors
set forth in Vapor Form 10-K. These forward-looking statements are made as of the date of this press release, and Vapor assumes
no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected
in the forward-looking statements.
Contacts:
Media Relations:
Caitlin Kasunich / Kenneth Cousins
KCSA Strategic
Communications
ckasunich@kcsa.com
/ kcousins@kcsa.com
(212) 896-1241
/ (212) 896-1254
Investor
Relations: Jeffrey Goldberger / Garth Russell
KCSA Strategic
Communications
jgoldberger@kcsa.com
/ grussell@kcsa.com
(212) 896-1249
/ (212) 896-1250
VAPOR
CORP.
CONDENSED
CONSOLIDATED BALANCE SHEETS
| |
March 31, 2015 | | |
December 31, 2014 | |
| |
(Unaudited) | | |
| |
ASSETS | |
| | | |
| | |
CURRENT ASSETS: | |
| | | |
| | |
Cash | |
$ | 1,911,199 | | |
$ | 471,194 | |
Due from merchant credit card processor, net of reserve for chargebacks of $41,355 and $2,500, respectively | |
| 348,192 | | |
| 111,968 | |
Accounts receivable, net of allowance of $228,856 and $369,731, respectively | |
| 203,793 | | |
| 239,652 | |
Inventories | |
| 2,536,149 | | |
| 2,048,883 | |
Prepaid expenses and vendor deposits | |
| 527,207 | | |
| 664,103 | |
Loans receivable, net | |
| - | | |
| 467,095 | |
Deferred financing costs, net | |
| 87,292 | | |
| 122,209 | |
TOTAL CURRENT ASSETS | |
| 5,613,832 | | |
| 4,125,104 | |
| |
| | | |
| | |
Property and equipment, net of accumulated depreciation of $158,238 and $84,314, respectively | |
| 633,705 | | |
| 712,019 | |
Intangible assets, net of accumulated amortization of $22,177 and $0, respectively | |
| 2,058,423 | | |
| - | |
Goodwill | |
| 15,654,484 | | |
| - | |
Other assets | |
| 92,131 | | |
| 91,360 | |
| |
| | | |
| | |
TOTAL ASSETS | |
$ | 24,052,575 | | |
$ | 4,928,483 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
| |
| | | |
| | |
CURRENT LIABILITIES: | |
| | | |
| | |
Accounts payable | |
$ | 2,303,051 | | |
$ | 1,920,135 | |
Accrued expenses | |
| 1,419,241 | | |
| 975,112 | |
Senior convertible notes payable – related parties, net of debt discount of $781,250 and $1,093,750, respectively | |
| 468,750 | | |
| 156,250 | |
Convertible notes, net of debt discount of $49,421 and $0 , respectively | |
| 517,579 | | |
| - | |
Notes payable – related party | |
| 1,000,000 | | |
| - | |
Current portion of capital lease | |
| 52,015 | | |
| 52,015 | |
Term loan | |
| 523,727 | | |
| 750,000 | |
Customer deposits | |
| 50,744 | | |
| 140,626 | |
Income taxes payable | |
| 3,092 | | |
| 3,092 | |
Derivative liabilities | |
| 87,603 | | |
| - | |
TOTAL CURRENT LIABILITIES | |
| 6,425,802 | | |
| 3,997,230 | |
| |
| | | |
| | |
Capital Lease, net of current portion | |
| 107,195 | | |
| 119,443 | |
TOTAL LIABILITIES | |
| 6,532,997 | | |
| 4,116,673 | |
| |
| | | |
| | |
COMMITMENTS AND CONTINGENCIES | |
| | | |
| | |
| |
| | | |
| | |
STOCKHOLDERS’ EQUITY: | |
| | | |
| | |
| |
| | | |
| | |
Preferred stock, $.001 par value, 1,000,000 shares authorized, none issued | |
| - | | |
| - | |
Common stock, $.001 par value, 50,000,000 shares authorized, 33,635,758 and 16,761,911 shares issued and outstanding, respectively | |
| 33,636 | | |
| 16,762 | |
Additional paid-in capital | |
| 36,699,041 | | |
| 16,026,951 | |
Accumulated deficit | |
| (19,213,099 | ) | |
| (15,231,903 | ) |
TOTAL STOCKHOLDERS’ EQUITY | |
| 17,519,578 | | |
| 811,810 | |
| |
| | | |
| | |
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY | |
$ | 24,052,575 | | |
$ | 4,928,483 | |
See
notes to unaudited condensed consolidated financial statements
VAPOR
CORP.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| |
For The Three Months
Ended March 31, | |
| |
2015 | | |
2014 | |
| |
| | |
| |
SALES, NET | |
$ | 1,468,621 | | |
$ | 4,792,544 | |
Cost of goods sold | |
| 1,651,110 | | |
| 3,831,928 | |
GROSS (LOSS) PROFIT | |
| (182,489 | ) | |
| 960,616 | |
| |
| | | |
| | |
EXPENSES: | |
| | | |
| | |
Selling, general and administrative | |
| 3,243,189 | | |
| 2,769,726 | |
Advertising | |
| 105,177 | | |
| 367,615 | |
Total operating expenses | |
| 3,348,366 | | |
| 3,137,341 | |
Operating loss | |
| (3,530,855 | ) | |
| (2,176,725 | ) |
Other (expense) income: | |
| | | |
| | |
Amortization of deferred financing costs | |
| (34,917 | ) | |
| - | |
Change in fair value of derivative liabilities | |
| (37,965 | ) | |
| - | |
Interest expense | |
| (378,775 | ) | |
| (28,434 | ) |
Interest income | |
| 1,316 | | |
| - | |
Total other expense | |
| (450,341 | ) | |
| (28,434 | ) |
LOSS BEFORE INCOME TAX (BENEFIT) EXPENSE | |
| (3,981,196 | ) | |
| (2,205,159 | ) |
Income tax benefit | |
| - | | |
| 752,400 | |
NET LOSS | |
$ | (3,981,196 | ) | |
$ | (1,452,759 | ) |
| |
| | | |
| | |
LOSS PER COMMON
SHARE – BASIC AND DILUTED | |
$ | (0.18 | ) | |
$ | (0.09 | ) |
WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING – BASIC AND DILUTED | |
| 22,474,273 | | |
| 16,267,750 | |
See
notes to unaudited condensed consolidated financial statements
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