Item 3.02 Unregistered Sales of Equity Securities.
On May 19, 2014, we closed the third and final tranche of the financing
contemplated pursuant to the terms of the Share Exchange Agreement entered into
on February 14, 2014 between us, Vapor Hub Inc., a California corporation,
Delite Products, Inc., a California corporation and the shareholders of both
companies. At the closing, we issued a convertible promissory note in the
principal amount of $175,000 to one investor in exchange for cash proceeds of
$175,000. The note bears interest at a rate of 8% per annum, with interest
being payable on May 15th of each year that the note remains outstanding. The
principal amount of the note is convertible at any time, in whole or in part, at
our election or the election of the holder into shares of our common stock at a
price equal to the greater of $0.15 or 90% of the average closing prices of our
common stock for the ten trading days immediately preceding the applicable
conversion date. Unless earlier converted or repaid, the principal amount of
the note is due and payable on May 19, 2017. We may prepay the principal amount
of the note at any time, in whole or in part, without the prior written consent
of the holder. If an event of default occurs under the note, the principal
amount of the note together with interest will, at the holder's election, become
immediately due and payable.
We issued the convertible note to one non-US Person (as that term is defined in
Regulation S of the Securities Act of 1933) relying on Regulation S of the
Securities Act of 1933.