UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934 (Amendment No. __)
Filed
by Registrant |
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Filed by Party
other than Registrant |
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Check the appropriate
box: |
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[X] |
Preliminary
Proxy Statement |
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Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy
Statement |
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Definitive Additional
Materials |
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Soliciting Materials
Pursuant to §240.14a-12 |
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VAPOR
CORP.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X] |
No
fee required. |
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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(1) |
Title
of each class of securities to which transaction applies: |
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(2) |
Aggregate
number of securities to which transaction applies: |
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(3) |
Per
unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined): |
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$_____
per share as determined under Rule 0-11 under the Exchange Act. |
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(4) |
Proposed
maximum aggregate value of transaction: |
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(5) |
Total
fee paid: |
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Fee
paid previously with preliminary materials. |
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Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date
of its filing. |
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(1) |
Amount
previously paid: |
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(2) |
Form, Schedule
or Registration Statement No.: |
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Filing Party: |
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Date Filed: |
TABLE
OF CONTENTS
Vapor
Corp.
3001
Griffin Road
Dania
Beach, Florida 33312
(888)
482-7671
To
The Shareholders of Vapor Corp.:
We
are pleased to invite you to attend a Special Meeting of the shareholders of Vapor Corp., which will be held at 1:00 PM on Thursday,
October 15, 2015 at our corporate headquarters in Dania, Florida, at the above address, for the following purposes:
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1. |
To
approve an amendment to our Certificate of Incorporation to increase our authorized shares of common stock; |
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2. |
To
approve an amendment to our Certificate of Incorporation to increase our authorized shares of preferred stock; |
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3. |
To
approve the issuance of certain shares of common stock in compliance with the requirements of the Nasdaq Capital Market; |
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4. |
To
approve an amendment to the exercise price of certain previously issued warrants in compliance with the requirements of the
Nasdaq Capital Market; and |
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To
approve an amendment to the conversion price of certain previously issued convertible notes in compliance with the requirements
of the Nasdaq Capital Market. |
Vapor’s
Board of Directors has fixed the close of business on August 18, 2015 as the record date for a determination of shareholders entitled
to notice of, and to vote at, this Special Meeting or any adjournment thereof.
Important
Notice Regarding the Availability of Proxy Materials for the Special Meeting of Shareholders to Be Held on Thursday, October
15, 2015: We are mailing to many of our shareholders a Notice of Internet Availability of Proxy Materials (which we refer
to as a “Notice”), rather than mailing a full paper set of the materials. The Notice contains instructions on how
to access our proxy materials on the Internet, as well as instructions on obtaining a paper copy of the proxy materials. This
process is more environmentally friendly and reduces our costs to print and distribute these materials. All shareholders who do
not receive such a Notice, including shareholders who have previously requested to receive a paper copy of the materials, will
receive a full set of paper proxy materials by U.S. mail. An electronic version of the Proxy Statement are available at: https://www.proxyvote.com
If
You Plan to Attend
Please
note that space limitations make it necessary to limit attendance to shareholders. Registration and seating will begin at 12:30
PM. Shares can be voted at the meeting only if the holder is present in person or by valid proxy.
For
admission to the meeting, each shareholder may be asked to present valid picture identification, such as a driver’s license
or passport, and proof of stock ownership as of the record date, such as the enclosed proxy card or a brokerage statement reflecting
stock ownership. Cameras, recording devices and other electronic devices will not be permitted at the meeting.
If
you do not plan on attending the meeting, please vote your shares via the Internet, by phone or by signing and dating the enclosed
proxy and return it in the business envelope provided. Your vote is very important.
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By
the Order of the Board of Directors: |
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/s/
Jeffrey Holman |
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Jeffrey Holman
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Chairman of the
Board and Chief Executive Officer |
Dated:
August 11, 2015
Whether
or not you expect to attend in person, we urge you to vote your shares at your earliest convenience. This will ensure the presence
of a quorum at the meeting. Promptly voting your shares via the Internet, by phone or by signing, dating, and returning the enclosed
proxy card will save us the expenses and extra work of additional solicitation. An addressed envelope for which no postage is
required if mailed in the United States is enclosed if you wish to vote by mail. Submitting your proxy now will not prevent you
from voting your shares at the meeting if you desire to do so, as your proxy is revocable at your option. Your vote is important,
so please act today!
Vapor
Corp.
3001
Griffin Road
Dania
Beach, Florida 33312
(888)
482-7671
2015
SPECIAL MEETING OF SHAREHOLDERS
PROXY
STATEMENT
Why
am I receiving these materials?
These
proxy materials are being sent to the holders of shares of the voting stock of Vapor Corp., a Delaware corporation, which we refer
to as “Vapor” or the “Company,” in connection with the solicitation of proxies by our Board of Directors,
which we refer to as the “Board,” for use at the Special Meeting of Shareholders to be held at 1:00 PM on Thursday,
October 15, 2015 at our corporate headquarters at the above address in Dania, Florida. The proxy materials relating to the Special
Meeting are first being mailed to shareholders entitled to vote at the meeting on or about ________ ____, 2015.
Why
did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the full
set of proxy materials?
We
are pleased to be using the SEC rule that allows companies to furnish their proxy materials over the Internet. As a result, we
are mailing to many of our shareholders a notice of the Internet availability of the proxy materials instead of a paper copy of
the proxy materials. All shareholders receiving the notice will have the ability to access the proxy materials over the Internet
and request to receive a paper copy of the proxy materials by mail. Instructions on how to access the proxy materials over the
Internet or to request a paper copy may be found in the notice of the Internet availability of the proxy materials. In addition,
the notice contains instructions on how you may request to access proxy materials in printed form by mail or electronically on
an ongoing basis.
Why
didn’t I receive a notice in the mail about the Internet availability of the proxy materials?
We
are providing some of our shareholders, including shareholders who have previously requested to receive paper copies of the proxy
materials, with paper copies of the proxy materials instead of a notice of the Internet availability of the proxy materials.
In
addition, we are providing notice of the Internet availability of the proxy materials by e-mail to those shareholders who have
previously elected delivery of the proxy materials electronically. Those shareholders should have received an e-mail containing
a link to the website where those materials are available and a link to the proxy voting website.
How
can I access the proxy materials over the Internet?
Your
notice of the Internet availability of the proxy materials, proxy card or voting instruction card will contain instructions on
how to:
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View our proxy
materials for the Special Meeting on the Internet; and |
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Instruct us to
send our future proxy materials to you electronically by e-mail. |
Our
proxy materials are also available at www.proxyvote.com.
Your
notice of the Internet availability of the proxy materials, proxy card or voting instruction card will contain instructions on
how you may request to access proxy materials electronically on an ongoing basis. Choosing to access your future proxy materials
electronically will help us conserve natural resources and reduce the costs of distributing our proxy materials. If you choose
to access future proxy materials electronically, you will receive an e-mail with instructions containing a link to the website
where those materials are available and a link to the proxy voting website. Your election to access proxy materials by e-mail
will remain in effect until you terminate it.
How
may I obtain a paper copy of the proxy materials?
Shareholders
receiving a notice of the Internet availability of the proxy materials will find instructions about how to obtain a paper copy
of the proxy materials on their notice. Shareholders receiving notice of the Internet availability of the proxy materials by e-mail
will find instructions about how to obtain a paper copy of the proxy materials as part of that e-mail. All shareholders who do
not receive a notice or an e-mail will receive a paper copy of the proxy materials by mail.
Who
is Entitled to Vote?
Our
Board has fixed the close of business on August 18, 2015 as the record date for a determination of shareholders entitled to notice
of, and to vote at, this Special Meeting or any adjournment thereof. On the record date, there were ________ shares of common
stock outstanding. Each share of Vapor common stock represents one vote that may be voted on each matter that may come before
the Special Meeting. As of the record date, Vapor had no other outstanding securities with voting rights.
What
is the difference between holding shares as a record holder and as a beneficial owner?
If
your shares are registered in your name with our transfer agent, Equity Stock Transfer, you are the “record holder”
of those shares. If you are a record holder, these proxy materials have been provided directly to you by Vapor.
If
your shares are held in a stock brokerage account, a bank or other holder of record, you are considered the “beneficial
owner” of those shares held in “street name.” If your shares are held in street name, these proxy materials
have been forwarded to you by that organization. As the beneficial owner, you have the right to instruct this organization on
how to vote your shares.
Who
May Attend the Meeting?
Record
holders and beneficial owners may attend the Special Meeting. If your shares are held in street name, you will need to bring a
copy of a brokerage statement or other documentation reflecting your stock ownership as of the record date. Please see below for
instructions on how to vote at the Special Meeting if your shares are held in street name.
How
Do I Vote?
Whether
you hold shares directly as the shareholder of record or through a broker, trustee or other nominee as the beneficial owner, you
may direct how your shares are voted without attending the Special Meeting. There are three ways to vote by proxy:
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Vote
by Internet. By following the instructions on the notice, proxy card or voting instruction card. |
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Vote
by phone. Shareholders of record may vote by phone by calling 1 (800) 690-6903. Shareholders who are beneficial owners
of their shares may vote by phone by calling the number specified on the voting instruction card provided by their broker,
trustee or nominee. |
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Vote
by mail. Shareholders of record may vote by mail by completing, signing and dating their proxy card or voting instruction
card and mailing it in the accompanying pre-addressed envelope. |
If
you vote by Internet or phone, please DO NOT mail your proxy card.
What
constitutes a Quorum?
To
carry on the business of the Special Meeting, we must have a quorum. A quorum is present when a majority of the outstanding shares
of stock entitled to vote, as of the record date, are represented in person or by proxy. Shares owned by Vapor are not considered
outstanding or considered to be present at the Special Meeting. Broker non-votes (because there are routine matters presented
at the Special Meeting) and abstentions are counted as present for the purpose of determining the existence of a quorum.
What
happens if Vapor is unable to obtain a Quorum?
If
a quorum is not present to transact business at the Special Meeting or if we do not receive sufficient votes in favor of the proposals
by the date of the Special Meeting, the persons named as proxies may propose one or more adjournments of the Special Meeting to
permit solicitation of proxies.
What
is a broker non-vote?
If
your shares are held in street name, you must instruct the organization who holds your shares how to vote your shares. If you
do not provide voting instructions, your shares will not be voted on any non-routine proposal. This vote is called a “broker
non-vote.” Broker non-votes do not count as a vote “FOR” or “AGAINST” any of the proposals. Because
proposals 1 and 2 require a majority of our outstanding shares to vote “FOR” approval, a broker non-vote will adversely
affect these proposals.
If
you are the shareholder of record, and you sign and return a proxy card without giving specific voting instructions, then the
proxy holders will vote your shares in the manner recommended by our Board on all matters presented in this Proxy Statement and
as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the
meeting. If your shares are held in street name and you do not provide specific voting instructions to the organization that holds
your shares, the organization may generally vote at its discretion on routine matters, but not on non-routine matters. If you
sign your vote instruction form but do not provide instructions on how your broker should vote, your broker will vote your shares
as recommended by our Board on any non-routine matter. See the note below and the following question and answer.
Which
Proposals are considered “Routine” or “Non-Routine”?
Proposals
1 and 2 are considered routine and Proposals 3, 4 and 5 are considered non-routine.
How
are abstentions treated?
Abstentions
only have an effect on the outcome of any matter being voted on that requires the approval based on our total voting stock outstanding.
Thus, abstentions will have an adverse effect on Proposals 1 and 2.
How
Many Votes are Needed for Each Proposal to Pass, is Broker Discretionary Voting Allowed and What is the Effect of an Abstention?
Proposals | |
Vote
Required | |
Broker
Discretionary
Vote Allowed | |
Effect
of
Abstentions on
the Proposal |
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1. To approve the amendment to the Certificate of Incorporation to increase the authorized shares
of common stock | |
Majority of the outstanding voting shares | |
Yes | |
Vote against |
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2. To approve the amendment to the Certificate of Incorporation to increase the authorized shares
of preferred stock | |
Majority of the outstanding voting shares | |
Yes | |
Vote against |
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3. To approve the issuance of certain additional shares | |
Majority of the votes cast | |
No | |
No effect |
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4. To approve an amendment to the exercise price of certain warrants | |
Majority of the votes cast | |
No | |
No effect |
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5. To approve an amendment to the conversion price of certain convertible notes | |
Majority of the votes cast | |
No | |
No effect |
What
are the Voting Procedures?
In
voting by proxy with regard to the proposals, you may vote in favor of each proposal or against each proposal, or in favor of
some proposals and against others, or you may abstain from voting on any of these proposals. You should specify your respective
choices on the accompanying proxy card or your vote instruction form.
Is
My Proxy Revocable?
You
may revoke your proxy and reclaim your right to vote up to and including the day of the Special Meeting by giving written notice
to the Corporate Secretary of Vapor, by delivering a proxy card dated after the date of the proxy or by voting in person at the
Special Meeting. All written notices of revocation and other communications with respect to revocations of proxies should be addressed
to: Vapor Corp., 3001 Griffin Road, Dania Beach, Florida 33312, Attention: Corporate Secretary.
Who
is Paying for the Expenses Involved in Preparing and Mailing this Proxy Statement?
All
of the expenses involved in preparing, assembling and mailing these proxy materials and all costs of soliciting proxies will be
paid by Vapor. In addition to the solicitation by mail, proxies may be solicited by our officers and regular employees by telephone
or in person. Such persons will receive no compensation for their services other than their regular salaries. Arrangements will
also be made with brokerage houses and other custodians, nominees and fiduciaries to forward solicitation materials to the beneficial
owners of the shares held of record by such persons, and we may reimburse such persons for reasonable out of pocket expenses incurred
by them in so doing. We may hire an independent proxy solicitation firm.
What
Happens if Additional Matters are Presented at the Special Meeting?
Other
than the items of business described in this Proxy Statement, we are not aware of any other business to be acted upon at the Special
Meeting. If you submit a signed proxy card, the persons named as proxy holders, Messrs. Jeffrey Holman and Greg Brauser, will
have the discretion to vote your shares on any additional matters properly presented for a vote at the Special Meeting.
What
is “householding” and how does it affect me?
Record
holders who have the same address and last name will receive only one copy of their proxy materials, unless we are notified that
one or more of these record holders wishes to continue receiving individual copies. This procedure will reduce our printing costs
and postage fees. Shareholders who participate in householding will continue to receive separate proxy cards.
If
you are eligible for householding, but you and other record holders with whom you share an address, receive multiple copies of
these proxy materials, or if you hold Vapor stock in more than one account, and in either case you wish to receive only a single
copy of each of these documents for your household, please contact our Corporate Secretary at: Vapor Corp., 3001 Griffin Road,
Dania Beach, Florida 33312, (888) 482-7671.
If
you participate in householding and wish to receive a separate copy of these proxy materials, or if you do not wish to continue
to participate in householding and prefer to receive separate copies of these documents in the future, please contact our Corporate
Secretary as indicated above. Beneficial owners can request information about householding from their brokers, banks or other
holders of record.
Do
I Have Dissenters’ (Appraisal) Rights?
Appraisal
rights are not available to Vapor shareholders with any of the proposals brought before the Special Meeting.
Interest
of Officers and Directors in Matters to Be Acted Upon
If
any of the proposals described in this proxy statement are approved, none of our officers and directors will receive any extra
or special benefit not shared on a pro rata basis by all other holders of the Company’s securities.
The
Board Recommends that Shareholders Vote “For” Proposal Nos. 1, 2, 3, 4, and 5.
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth certain information regarding the beneficial ownership of our common stock as of August 10, 2015 for:
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our
Named Executive Officers, which include all Chief Executive Officers serving during fiscal year 2014 and our two other most
highly compensated executive officers, as determined by reference to total compensation for fiscal year 2014, who were serving
as executive officers at the end of fiscal year 2014; |
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each
of our directors; |
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all
of our current directors and executive officers as a group; and |
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each
shareholder known by us to own beneficially more than five percent of our common stock. |
Except
as indicated in footnotes to this table, we believe that the shareholders named in this table have sole voting and investment
power with respect to all shares of common stock shown to be beneficially owned by them, based on information provided to us by
such shareholders. Unless otherwise indicated, the address for each director and executive officer listed is: c/o Vapor Corp.,
3001 Griffin Road, Dania Beach, Florida 33312.
Name of Beneficial Owner | |
Number of Common
Share Equivalents
Beneficially Owned (1) | | |
Percentage of Common
Share Equivalents
Beneficially Owned | |
Named Executive Officers and Directors: | |
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Jeffrey Holman (2) | |
| 256,221 | | |
| 3.0 | % |
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Kevin Frija (3) | |
| 46,895 | | |
| * | |
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Harlan Press (4) | |
| 31,399 | | |
| * | |
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Christopher Santi (5) | |
| 11,556 | | |
| * | |
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Gregory Brauser (6) | |
| 166,175 | | |
| 2.0 | % |
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William Conway III (7) | |
| 0 | | |
| 0 | % |
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Daniel MacLachlan (8) | |
| 0 | | |
| 0 | % |
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Nikhil Raman (9) | |
| 0 | | |
| 0 | % |
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All Executive Officers and Directors as a Group (7
Persons) (10) | |
| 512,246 | | |
| 5.6 | % |
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Other Five Percent Shareholder: | |
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Alpha Capital Anstalt (11) | |
| 1,028,653 | | |
| 7.9 | % |
* |
Represents
less than 1% of the outstanding shares of common stock |
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(1)
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Applicable
percentages are based on 8,470,505 shares outstanding as of August 10, 2015, adjusted as required by rules of the SEC. Beneficial
ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities.
Shares of common stock underlying options, warrants and convertible notes currently exercisable or convertible, or exercisable
or convertible within 60 days are deemed outstanding for computing the percentage of the person holding such securities but
are not deemed outstanding for computing the percentage of any other person. |
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(2)
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Jeffrey
Holman: A director and executive officer. Includes 24,000 vested options. |
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(3) |
Kevin
Frija: Former chief executive officer. Because Mr. Frija served as a Chief Executive Officer during fiscal 2014, he is
a Named Executive Officer under the SEC’s rules and regulations. Includes 36,000 vested options and 895 shares underlying
warrants. The shares of common stock owned by Mr. Frija are based on the Company’s transfer agent records. |
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(4)
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Harlan
Press: A former executive officer. Includes 8,000 vested options and 620 shares underlying warrants. |
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(5)
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Christopher
Santi: An executive officer. Represents vested options. |
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(6)
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Gregory
Brauser: A director and executive officer. Does not include 13,848 shares of common stock underlying restricted stock
units which have vested but cannot be acquired within 60 days. |
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(7)
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William
Conway III: A director. |
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(8) |
Daniel
MacLachlan: A director. |
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(9) |
Nikhil
Raman: A director. |
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(10) |
Total
D&O: Includes securities beneficially owned by executives who are not a Named Executive Officer. |
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(11) |
Alpha
Capital Anstalt: Does not include additional shares underlying warrants and convertible notes that cannot be exercised
within 60 days due to a 4.99% blocker. Address is Lettstrasse 32, P.O. Box 1212, FL 9490, Vaduz Furstentum Liechtenstein c/o
LH Financial Services Corp., 510 Madison Avenue, Ste. 1400, New York, New York 10022. |
PROPOSAL
1.
AMENDMENT
TO OUR CERTIFICATE OF INCORPORATION TO INCREASE OUR AUTHORIZED COMMON STOCK FROM 150 MILLION TO 500 MILLION SHARES
Our
Board adopted a resolution to amend our Certificate of Incorporation, which we refer to as “Certificate,” to increase
the number of shares of common stock that we are authorized to issue from 150,000,000 to 500,000,000 shares and has directed that
the proposed amendment be submitted to our shareholders for their approval and adoption. If only Proposal 1, and not Proposal
2 (which relates to our authorized preferred stock and is described below) is approved by shareholders, the amendment will not
change the number of shares of preferred stock that are authorized, and the total authorized shares will be increased from 151,000,000
to 501,000,000. The form of the amendment that will be adopted if only Proposal 1, and not Proposal 2, is approved by shareholders
is attached as Annex A to this Proxy Statement.
If
both Proposal 1 and Proposal 2 are approved by shareholders, our authorized preferred stock will also be increased to 5,000,000
authorized shares, and our total authorized shares will be increased from 151,000,000 to 505,000,000. The form of the amendment
that will be adopted if both Proposal 1 and Proposal 2 are approved by shareholders is attached as Annex C to this Proxy
Statement.
Overview
We
may issue shares of capital stock to the extent such shares have been authorized under our Certificate. Our Certificate currently
authorizes us to issue up to 150,000,000 shares of common stock and 1,000,000 shares of preferred stock. No shares of our common
stock are held in treasury.
In
July 2015, the Company closed a registered public offering of units of the Company’s securities consisting of one-fourth
of a share of the Company’s Series A Convertible Preferred Stock (convertible into 10 shares of common stock) and 20 Series
A Warrants, for gross proceeds of $41.4 million. Pursuant to the underwriting agreement entered into in connection with the offering,
the Company agreed to seek shareholder approval of an amendment to the Company’s Certificate increasing authorized capital
to 500,000,000 shares. In addition to complying with the Company’s contractual obligations under the underwriting agreement,
the Company also believes it is in the Company’s and shareholders’ best interests to increase authorized capital because
of certain provisions of the Series A Warrants sold in the registered offering. The Company does not presently have sufficient
authorized capital to issue shares of common stock upon exercise of all outstanding Series A Warrants. If the Company continues
to lack sufficient authorized capital to issue shares of common stock upon exercise of the Series A Warrants when such warrants
become exercisable, the Company will be required to make cash payments to warrant holders upon exercise. The Company believes
it is advantageous to the Company and its financial condition to have the ability to settle warrant exercises with the issuance
of shares rather than cash payments. Increasing the Company’s authorized common stock to 500,000,000 authorized shares will
give the Company this flexibility.
Other
than issuing shares of common stock upon the conversion of the Series A Convertible Preferred Stock and the exercise of the Series
A Warrants, as described above, the Company presently has no specific plans to issue the shares of common stock that will become
newly authorized upon amendment of the Certificate.
The
additional shares of common stock to be authorized after the amendment to the Certificate would have rights identical to the currently
outstanding shares, except for effects incidental to increasing the number of outstanding shares, such as the dilution of current
shareholders’ ownership and voting interests when shares are issued. Under our Certificate, our shareholders do not have
preemptive rights with respect to our common stock. Thus, should our Board elect to issue additional shares, existing shareholders
would not have any preferential rights to purchase any shares.
Possible
Anti-Takeover Effects of the Amendment
The
proposed amendment to our Certificate is not being recommended in response to any specific effort of which our Board is aware
to obtain control of Vapor by means of a merger, tender offer, solicitation, or otherwise, and our Board does not intend or view
the proposed increase in authorized common stock as an anti-takeover measure. However, the ability of our Board to authorize the
issuance of the additional shares of common stock that would be available if the proposed amendment is approved and adopted could
have the effect of discouraging or preventing a hostile takeover.
The
Board recommends a vote “For” this proposal.
PROPOSAL
2.
AMENDMENT
TO OUR CERTIFICATE OF INCORPORATION TO INCREASE OUR AUTHORIZED PREFERRED STOCK FROM 1 MILLION TO 5 MILLION SHARES
Our
Board adopted a resolution to amend our Certificate to increase the number of shares of preferred stock that we are authorized
to issue from 1,000,000 to 5,000,000 shares and has directed that the proposed amendment be submitted to our shareholders for
their approval and adoption. If only Proposal 2, and not Proposal 1 (which relates to our authorized common stock and is described
above) is approved by shareholders, the amendment will not change the number of shares of common stock that are authorized, and
the total authorized shares will be increased from 151,000,000 to 155,000,000. The form of the amendment that will be adopted
if only Proposal 2, and not Proposal 1, is approved by shareholders is attached as Annex B to this Proxy Statement.
If
both Proposal 1 and Proposal 2 are approved by shareholders, our authorized common stock will also be increased to 500,000,000
authorized shares, and our total authorized shares will be increased from 151,000,000 to 505,000,000. The form of the amendment
that will be adopted if both Proposal 1 and Proposal 2 are approved by shareholders is attached as Annex C to this Proxy
Statement.
Overview
We
may issue shares of capital stock to the extent such shares have been authorized under our Certificate. Our Certificate currently
authorizes us to issue up to 150,000,000 shares of common stock and 1,000,000 shares of preferred stock with designations, rights
and preferences as may be determined from time to time by our Board of Directors.
As
of the date of this proxy statement, the Company has designated 1,000,000 shares of its preferred stock as the Series A Convertible
Preferred Stock and has issued 940,414 shares of Series A Convertible Preferred Stock. Consequently, although the Company has
the ability to re-designate its unissued shares of Series A Convertible Preferred Stock, it is presently has a very limited ability
to issue additional shares of preferred stock. The Board believes it is in the best interests of both the Company and shareholders
to increase the Company’s authorized shares of preferred stock in order to give the Company maximum flexibility as it structures
future capital raising transactions, strategic asset acquisitions and/or business combinations.
The
Company presently has no specific plans to issue the shares of preferred stock that will become newly authorized upon amendment
of the Certificate. Because the rights and preferences of any future series of preferred stock which the Board may designate are
presently unknown, it is not possible to determine what effect the issuance of such future shares of preferred stock may have
on existing shareholders.
Possible
Anti-Takeover Effects of the Amendment
Our
Certificate of Incorporation, both presently and as proposed to be amended, authorizes the issuance of shares of “blank
check” preferred stock with designations, rights and preferences as may be determined from time to time by our Board of
Directors. Our Board is empowered, without shareholder approval, to issue a series of preferred stock with dividend, liquidation,
conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our common shareholders.
The issuance of a series of preferred stock could be used as a method of discouraging, delaying or preventing a change in control.
For example, it would be possible for our Board of Directors to issue preferred stock with voting or other rights or preferences
that could impede the success of any attempt to effect a change in control of our company. Therefore, approval of the proposed
amendment, and the designation and issuance of future series of preferred stock, could assist the Company in delaying or preventing
unsolicited takeovers and changes in control or changes in our management. However, the proposed amendment to our Certificate
is not being recommended in response to any specific effort of which our Board is aware to obtain control of Vapor by means of
a merger, tender offer, solicitation, or otherwise, and our Board does not intend or view the proposed amendment as an anti-takeover
measure.
The
Board recommends a vote “For” this proposal.
PROPOSAL
3.
issuance
of 1,798,676
additional shares of common stock
Overview
On
June 19, 2015, to facilitate the Company’s ability to raise capital, the Company entered into waiver agreements with certain
investors in each of its private placement offerings under the securities purchase agreements dated March 3, 2015 and November
14, 2014. The waiver agreements amended certain terms of the securities purchase agreements in exchange for which the Company
agreed to issue the investors under the agreements additional shares of common stock in the event of certain future lower-priced
issuances of securities of the Company.
On
July 29, 2015, pursuant to the waiver agreements and in connection with the closing of the Company’s registered public offering
described under Proposal 1, above, the Company became obligated to issue prior investors a total of 2,559,437 additional shares
of common stock. However, under Nasdaq Marketplace Rule 5635(d), which we are subject to because our common stock is listed on
the Nasdaq Capital Market, we must obtain shareholder approval before we may issue 1,798,676 of these additional shares of common
stock. Therefore, the Company is seeking shareholder approval to permit the issuance of these 1,798,676 shares of common stock
in order to be able to comply with both the Company’s contractual obligations to its past investors and the requirements
of the Nasdaq Capital Market.
The
issuance of the additional shares of common stock is not expected to affect existing shareholders other than effects incidental
to increasing the number of outstanding shares, such as the dilution of current shareholders’ ownership and voting interests
when shares are issued.
Accordingly,
we ask our shareholders to vote “FOR” the following resolution at the Special Meeting:
“RESOLVED,
that the issuance of an additional 1,798,676 shares of common stock to investors in the Company’s November 2014 and March
2015 private placements in accordance with the waiver agreements dated June 19, 2015 is hereby APPROVED.”
The
Board recommends a vote “For” this proposal.
PROPOSAL
4.
Amendment
of 1,442,126 Warrants to Reduce Exercise Price to $1.10
Overview
As
described above, under Proposal 3, in June 2015, the Company entered into waiver agreements with certain prior investors amending
past securities purchase agreements in order to facilitate the Company’s future capital-raising efforts. In addition to
agreeing to issue additional shares to these prior investors in the event of certain future lower-priced equity issuances, the
Company also agreed to reduce the exercise price of certain outstanding warrants, including the warrants issued to investors in
its November 2014 and March 2015 private placements, certain warrants to be issued under the waiver agreements, and a warrant
issued to Chardan Capital Management, LLC in connection with the Company’s June 2015 private placement of debentures.
The
closing in July 2015 of the registered public offering described elsewhere in this proxy statement triggered an obligation by
the Company to reduce the exercise price of a total of 1,442,126 outstanding warrants from their original exercise prices, ranging
from $2.50 to $10.00, to an adjusted exercise price of $1.10. Nasdaq Marketplace Rule 5635(d) requires shareholder approval before
the adjustment to the exercise price of these warrants can take effect. Therefore, in order to permit the Company to comply with
its contractual obligations to past investors and the requirements of the Nasdaq Capital Market, the Company is seeking shareholder
approval to reduce the exercise price of these outstanding warrants to $1.10 per share.
The
repricing of the warrants is not expected to have any effect on existing shareholders.
Accordingly,
we ask our shareholders to vote “FOR” the following resolution at the Special Meeting:
“RESOLVED,
that the Company is authorized to reduce the exercise price of 1,442,126 outstanding warrants to purchase shares of common stock
issued to investors under the Company’s November 2014 private placement, the Company’s March 2015 private placement,
the waiver agreements dated June 19, 2015, and the June 2015 warrant issued to Chardan Capital Management, LLC to $1.10 per share.”
The
Board recommends a vote “For” this proposal.
PROPOSAL
5.
Amendment
of conversion PRICE OF $1,250,000 original principle amount of convertible notes to $1.10
Overview
As
previously described, in June 2015, the Company entered into waiver agreements with certain prior investors amending past securities
purchase agreements in order to facilitate the Company’s future capital-raising efforts. In addition to agreeing to issue
additional shares to these prior investors in the event of certain future lower-priced equity issuances, the Company also agreed
to reduce the conversion price of certain outstanding convertible notes issued to investors in its November 2014 private placements
in the original principal amount of $1,250,000.
The
closing in July 2015 of the registered public offering described elsewhere in this proxy statement triggered an obligation by
the Company to reduce the conversion price of these notes from their original conversion price of $5.50 to an adjusted conversion
price of $1.10. At the adjusted conversion price of $1.10 per share, a total of 1,215,911 shares of common stock are issuable
upon conversion in full of the original outstanding principal amount and maximum accruable interest. Nasdaq Marketplace Rule 5635(d)
requires shareholder approval before the adjustment to the conversion price of these notes can take effect. Therefore, in order
to permit the Company to comply with its contractual obligations to past investors and the requirements of the Nasdaq Capital
Market, the Company is seeking shareholder approval to reduce the conversion price of these outstanding notes to $1.10 per share.
The
amendment of the conversion price of the notes is not expected to affect existing shareholders other than effects incidental to
increasing the number of outstanding shares upon conversion of the notes, such as the dilution of current shareholders’
ownership and voting interests when shares are issued.
Accordingly,
we ask our shareholders to vote “FOR” the following resolution at the Special Meeting:
“RESOLVED,
that the Company is authorized to reduce the exercise price of $1,250,000 original principal amount of its convertible notes issued
November 2014, and additional interest accruable thereon, to $1.10 per share.”
The
Board recommends a vote “For” this proposal.
SHAREHOLDERS
SHOULD NOT DESTROY ANY AMENDED WARRANT(S) OR CONVERTIBLE NOTE(S) AND SHOULD NOT SUBMIT ANY WARRANT(S) OR NOTE(S) FOR REPLACEMENT
UNLESS REQUESTED TO DO SO.
SHAREHOLDERS
who may be affected by the reduction in the exercise price of the warrants described in Proposal 3 and the reduction in the conversion
price of the convertible notes described in Proposal 4 ARE advised to consult THEIR OWN tax advisors as to any possible tax consequences
based on EACH shareholder’s own particular situation.
OTHER
MATTERS
Vapor
has no knowledge of any other matters that may come before the Special Meeting and does not intend to present any other matters.
However, if any other matters shall properly come before the Meeting or any adjournment, the persons soliciting proxies will have
the discretion to vote as they see fit unless directed otherwise.
If
you do not plan to attend the Special Meeting, in order that your shares may be represented and in order to assure the required
quorum, please sign, date and return your proxy promptly. In the event you are able to attend the Special Meeting, at your request,
Vapor will cancel your previously submitted proxy.
Annex
A
CERTIFICATE
OF AMENDMENT TO CERTIFICATE OF INCORPORATION OF VAPOR CORP.
Vapor
Corp. (the “Company”), a corporation organized and existing under the General Corporation Law of the State of Delaware
(the “Delaware General Corporation Law”), hereby certifies as follows:
1.
Pursuant to Sections 242 and 228 of the Delaware General Corporation Law, the amendment herein set forth has been duly approved
by the Board of Directors and holders of a majority of the outstanding capital stock of the Company.
2.
Section 4 of the Certificate of Incorporation is amended to read as follows:
4.
The total number of shares of stock which the Corporation is authorized to issue is 501,000,000. 500,000,000 shares shall be common
stock, par value $0.001 per share (“Common Stock”), and 1,000,000 shall be preferred stock, par value $0.001
per share (“Preferred Stock”). Except as otherwise provided in this Corporations Certificate of Incorporation,
authority is hereby vested in the Board of Directors of the Corporation from time to time to provide for the issuance of shares
of one or more series of Preferred Stock and in connection therewith to fix by resolution or resolutions providing for the issue
of any such series, the number of shares to be included therein, the voting powers thereof, and such of the designations, preferences
and relative participating, optional or other special rights and qualifications, limitations and restrictions of each such series,
including, without limitation, dividend rights, voting rights, rights of redemption, or conversion into Common Stock rights, and
liquidation preferences, to the fullest extent now or hereafter permitted by the Delaware General Corporation Law and any other
provisions of this Amended and Restated Certificate of Incorporation. The Board of Directors is further authorized to increase
or decrease (but not below the number of such shares of such class or series then outstanding) the number of shares of any such
class or series subsequent to the issuance of shares of that class or series.
3.
This Certificate of Amendment to Certificate of Incorporation was duly adopted and approved by the shareholders of this Company
on the _____ day of ______ 2015 in accordance with Section 242 of the Delaware General Corporation Law.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment to Certificate of Incorporation as of the ___ day
of ______ 2015.
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VAPOR
CORP. |
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By: |
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____________________________________, |
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____________________________ |
Annex
B
CERTIFICATE
OF AMENDMENT TO CERTIFICATE OF INCORPORATION OF VAPOR CORP.
Vapor
Corp. (the “Company”), a corporation organized and existing under the General Corporation Law of the State of Delaware
(the “Delaware General Corporation Law”), hereby certifies as follows:
1.
Pursuant to Sections 242 and 228 of the Delaware General Corporation Law, the amendment herein set forth has been duly approved
by the Board of Directors and holders of a majority of the outstanding capital stock of the Company.
2.
Section 4 of the Certificate of Incorporation is amended to read as follows:
4.
The total number of shares of stock which the Corporation is authorized to issue is 155,000,000. 150,000,000 shares shall be common
stock, par value $0.001 per share (“Common Stock”), and 5,000,000 shall be preferred stock, par value $0.001
per share (“Preferred Stock”). Except as otherwise provided in this Corporations Certificate of Incorporation,
authority is hereby vested in the Board of Directors of the Corporation from time to time to provide for the issuance of shares
of one or more series of Preferred Stock and in connection therewith to fix by resolution or resolutions providing for the issue
of any such series, the number of shares to be included therein, the voting powers thereof, and such of the designations, preferences
and relative participating, optional or other special rights and qualifications, limitations and restrictions of each such series,
including, without limitation, dividend rights, voting rights, rights of redemption, or conversion into Common Stock rights, and
liquidation preferences, to the fullest extent now or hereafter permitted by the Delaware General Corporation Law and any other
provisions of this Amended and Restated Certificate of Incorporation. The Board of Directors is further authorized to increase
or decrease (but not below the number of such shares of such class or series then outstanding) the number of shares of any such
class or series subsequent to the issuance of shares of that class or series.
3.
This Certificate of Amendment to Certificate of Incorporation was duly adopted and approved by the shareholders of this Company
on the _____ day of ______ 2015 in accordance with Section 242 of the Delaware General Corporation Law.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment to Certificate of Incorporation as of the ___ day
of ______ 2015.
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VAPOR
CORP. |
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By: |
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____________________________________, |
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____________________________ |
Annex
C
CERTIFICATE
OF AMENDMENT TO CERTIFICATE OF INCORPORATION OF VAPOR CORP.
Vapor
Corp. (the “Company”), a corporation organized and existing under the General Corporation Law of the State of Delaware
(the “Delaware General Corporation Law”), hereby certifies as follows:
1.
Pursuant to Sections 242 and 228 of the Delaware General Corporation Law, the amendment herein set forth has been duly approved
by the Board of Directors and holders of a majority of the outstanding capital stock of the Company.
2.
Section 4 of the Certificate of Incorporation is amended to read as follows:
4.
The total number of shares of stock which the Corporation is authorized to issue is 505,000,000. 500,000,000 shares shall be common
stock, par value $0.001 per share (“Common Stock”), and 5,000,000 shall be preferred stock, par value $0.001
per share (“Preferred Stock”). Except as otherwise provided in this Corporations Certificate of Incorporation,
authority is hereby vested in the Board of Directors of the Corporation from time to time to provide for the issuance of shares
of one or more series of Preferred Stock and in connection therewith to fix by resolution or resolutions providing for the issue
of any such series, the number of shares to be included therein, the voting powers thereof, and such of the designations, preferences
and relative participating, optional or other special rights and qualifications, limitations and restrictions of each such series,
including, without limitation, dividend rights, voting rights, rights of redemption, or conversion into Common Stock rights, and
liquidation preferences, to the fullest extent now or hereafter permitted by the Delaware General Corporation Law and any other
provisions of this Amended and Restated Certificate of Incorporation. The Board of Directors is further authorized to increase
or decrease (but not below the number of such shares of such class or series then outstanding) the number of shares of any such
class or series subsequent to the issuance of shares of that class or series.
3.
This Certificate of Amendment to Certificate of Incorporation was duly adopted and approved by the shareholders of this Company
on the _____ day of ______ 2015 in accordance with Section 242 of the Delaware General Corporation Law.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment to Certificate of Incorporation as of the ___ day
of ______ 2015.
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VAPOR
CORP. |
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By: |
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____________________________________, |
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____________________________ |
VAPOR
CORP.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL
MEETING OF SHAREHOLDERS – OCTOBER 15, 2015 AT 1:00 PM
VOTING
INSTRUCTIONS
If
you vote by phone or internet, please DO NOT mail your proxy card.
|
MAIL: |
Please
mark, sign, date, and return this Proxy Card promptly using the enclosed envelope. |
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PHONE: |
Call
1 (800) 690-6903 |
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INTERNET: |
https://www.proxyvote.com |
Control
ID: |
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Proxy ID: |
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Password: |
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MARK
“X” HERE IF YOU PLAN TO ATTEND THE MEETING: [ ]
MARK
HERE FOR ADDRESS CHANGE [ ] New Address (if applicable):
IMPORTANT:
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When
signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign
in partnership name by authorized person.
Dated:
_______, 2015
(Print
Name of Shareholder and/or Joint Tenant)
(Signature
of Shareholder)
(Second
Signature if held jointly)
The
shareholder(s) hereby appoints Jeffrey Holman and Greg Brauser, or either of them, as proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of
the shares of voting stock of VAPOR CORP. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholder(s)
to be held at 1:00 p.m., New York time on October 15, 2015, at Vapor ’s headquarters, located at 3001 Griffin Road, Dania
Beach, Florida 33312, and any adjournment or postponement thereof.
This
proxy, when properly executed, will be voted in the manner directed herein. If no such direction
is made, this proxy will be voted “FOR” Proposals 1, 2, 3, 4 and 5. If any other business is presented at the meeting,
this proxy will be voted by the above-named proxies at the direction of the Board of Directors. At the present time, the Board
of Directors knows of no other business to be presented at the meeting.
Proposal:
1.
To approve the amendment to the Certificate of Incorporation to increase the authorized shares of common stock to 500,000,000 |
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FOR
[ ] |
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AGAINST
[ ] |
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ABSTAIN
[ ] |
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2.
To approve the amendment to the Certificate of Incorporation to increase the authorized shares of preferred stock to 5,000,000 |
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FOR
[ ] |
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AGAINST
[ ] |
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ABSTAIN
[ ] |
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3.
To approve the issuance of 1,798,676 additional shares of common stock |
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FOR
[ ] |
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AGAINST
[ ] |
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ABSTAIN
[ ] |
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4.
To approve reducing the exercise price of 1,442,126 outstanding warrants to $1.10 |
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FOR
[ ] |
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AGAINST
[ ] |
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ABSTAIN
[ ] |
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5.
To approve reducing the conversion price of $1,250,000 original principle amount of convertible notes to $1.10 |
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FOR
[ ] |
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AGAINST
[ ] |
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ABSTAIN
[ ] |
Control
ID:
Proxy
ID:
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