DANIA BEACH, Fla. and MIAMI -- Vapor Corp., a leading U.S.-based vaporizer and electronic-cigarette company whose brands include emagine vapor, Krave, VaporX, Hookah Stix, Alternacig, and Fifty-One, has signed a definitive agreement to merge with Vaporin Inc., a distributor and marketer of vaporizers, tanks, mods and e-liquid products, whereby Vapor will be the surviving entity.
At the effective time of the merger, all issued and outstanding shares of Vaporin common stock will be converted into the right to receive the number of shares of Vapor common stock such that former Vaporin stockholders will collectively hold approximately 45% of the issued and outstanding shares of Vapor common stock immediately following consummation of the merger.
The parties expect that the merger will close in the first half of 2015. The closing is conditioned upon the satisfaction of certain customary closing conditions.
In addition to these customary closing conditions, Vapor's obligation to close the merger is contingent upon Vapor obtaining agreements and commitments for certain third-party financing transactions. These conditions include that a new $3.5-million equity financing be placed into escrow with the only condition to the release of these funds from escrow to Vapor being the closing of the merger with Vaporin. Additionally, Vapor must have also received commitments from certain third parties for financing of up to $25 million.
Either party may terminate the merger agreement if the conditions to closing have not been satisfied or waived on or before May 14, 2015. Under certain circumstances, the termination of the merger agreement may obligate one of the parties to pay the other a termination fee.
The merger agreement follows the execution of a binding term sheet announced by Vapor and Vaporin companies on Nov. 6, 2014.
Vapor and Vaporin also entered into a 50/50 joint venture through Emagine the Vape Store LLC, a newly formed Delaware limited liability company. Vaporin will serve as the initial manager of Emagine and will manage the day-to-day operations of Emagine. The purpose of the joint venture is to obtain and build out retail stores for the sale of Vapor and Vaporin products under the "emagine vapor" and "The Vape Store Inc." names or other brands of the respective parties.
"I am extremely excited to advance towards the completion of our strategic merger with Vaporin," said Jeff Holman, chairman, president and CEO of Vapor. "In addition to Vaporin offering a high-quality, complimentary product line to Vapor, I am excited at the prospect of leveraging their retail knowledge and having their team spearhead our efforts to expand the footprint of our emagine vapor retail locations."
Commenting on the merger, Greg Brauser, chief operating officer of Vaporin Inc., said, "As a first-mover to satisfy shifting consumer demand toward vaporizers, Vapor Corp. remains at the forefront of this burgeoning industry. We are excited to join forces with Vapor in order to leverage their share of the e-cig, vaporizer and accessories market in building a unique brick-and-mortar retail presence for our combined product lines."
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